RIMS addresses complex emerging risks

Integrating emerging risk considerations into an ongoing risk management program is necessary to avoid future surprises, achieve strategic objectives and deliver long-term value, according to the newly published RIMS Executive Report “Navigating the Complexities of Emerging Risks.”

“In the face of so much uncertainty and volatility, business leaders around the world have challenged their risk management teams to identify, assess and deliver solutions to prepare the organisation for the impacts of emerging risks,” said RIMS president Patrick Sterling. “And, while the scope and speed of those risks are hard to gauge, there are common practices risk professionals can integrate to empower decision-makers, demonstrate value and steer the organisation in the right direction.”

According to the survey 95 percent reported that the trigger for recategorising a risk from emerging to active or ongoing status is understanding its impact. Yet only 27 percent address the impact of emerging risks in their risk assessments, while 23 percent capture the likelihood of these potential unknowns. When scanning the horizon for future risks, only 24 percent look three to five years ahead and only 34 percent consider emerging risks during the strategy setting process.

Common practices used by risk professionals to mitigate or respond to emerging risks included developing risk response strategies, identifying more specific emerging risk scenarios and related response plans, identifying leading risk indicators for ongoing monitoring and separately considering emerging opportunities and plans.