Many organisations become motivated to adopt risk management practices in order to comply with new regulation.

The problem with this approach, however, is that practices remain compartmentalised as the years go by, unaligned with business objectives and performance indicators.

Enterprise Risk Management (ERM), by contrast, aims to align risk management with the key drivers of value in a business. Risk management becomes more valuable from a business perspective and increases managers' chances of meeting strategic objectives.

An ERM framework cannot be implemented overnight but its value cannot be overestimated.

Critical questions you need to consider

• Is your current system of risk management unable to cope with the evolving demands of corporate governance?

• Is your senior management as committed to managing risk as it should be?

• Do you find you require more information about risk in order to make better decisions?

• Are you aware of the efficiencies that can be gained when different enterprise risks are understood on an integrated and correlated basis?