Put your money where your Risks are
Lee Raymond the CEO of Exxon Mobil was allergic to idle operational practices. He required the corporate-planning team to identify 3 to 5 percent of the company's assets for potential disposal every year. Exxon Mobil's divisions were allowed to retain assets only if they could demonstrate a tangible and compelling turnaround program for an underperforming asset.
Most companies allocate the same resources to the same business units year after year. That makes it difficult to realize strategic Governance, risk Management and Compliance (GRC) goals and undermines performance.
Capital allocations like GRC procedures are essentially fixed. Companies with higher levels of GRC capital reallocation experienced higher average shareholder returns. Idle operational practices occur when you use risk management processes as a check the box approach.
Some company's allocates risk resources, talent, and research amounts consistently every year, making small changes but always following the same broad risk management pattern. Other continually evaluates the risk Management performance of business units, and adjusts resource allocations based on each division's relative Risk Management.
Interestingly, when management's appetite for risk and compliance is greater than the organization's ability to deliver it, a number of management risk projects ultimately result in failure. The opposite is true as well. When the organization delivers too much Risk and Compliance there are failures as well.
Every corporation believes it has a rigorous GRC process in pace, it is the ability to find the right level at the right place at the right time is the key.
The Copenhagen Compliance Conference covers a variety of speeches and lectures and panel discussions that will enlighten you on How to put your money where your Risks are, with a speech by Simon Collins.
From Watchdog to Custodian to a Strategic Business Partner. The GRC processes of adding value to the Organisation and bottom line.
The financial uncertainty has forced companies to involve its Governance, Risk and Compliance Officers more responsibly to provide solutions to the new challenges with increased demands for far-sighted results due to their specific skills to oversee Governance Risk and Compliance processes. The GRC officers are also playing a role in identifying the company's growth pattern and have a greater say in which direction it should go to avoid major pitfalls.
- Provide input to strategy, analysis, coaching and growth
- Ensure timely information and good GRC management
- Deliver strong economic GRC analyzes on key business units
- Compliance to increased regulation and complexity of managing across borders
- Solutions to technological limitations and outdated IT systems,
- Working towards greater efficiency and better exchange of information
Simon Collins, Managing Director Resources Compliance, UK
The author of this article was previously Business Controller for ExxonMo