Report shows the business benefits of enterprise risk management

Published: Friday, 01 May 2015 13:35

RIMS research study finds correlation between mature ERM programs and an average 25 percent jump in firm value.

In two new RIMS Executive Reports, entitled, ‘Why a Mature ERM Effort is Worth the Investment,’ and its companion ‘Testing Value Creation Through ERM Maturity’ the Society and the original study’s authors respectively comment on recent findings that support organizations’ decisions to invest in mature enterprise risk management programs

“With key findings that indicate that organizations exhibiting mature risk management practices realize an increased valuation premium of 25 percent, risk professionals now have the documented support that is often necessary to gain buy-in from senior leadership,” said Carol Fox, RIMS Director of Strategic and Enterprise Risk practice. “We hope these reports will spur greater investment by organizations in risk management staffing, enterprise-wide risk training and awareness, analysis, and other resources to achieve higher levels of risk management maturity – and value.”

The study’s authors used data from RIMS Risk Maturity Model to assess the correlation between mature risk programs and organizational value. These RIMS Executive Reports discuss the attributes of a mature ERM program, how each of those attributes impacts value, as well as a summary of the researchers’ key findings.

The companion RIMS Executive Report ‘Testing Value Creation Through ERM Maturity’ authored by Mark Farrell of Queen’s University Management School and Dr. Ronan Gallagher of University of Edinburgh Business School, provides a more in-depth look at their findings and research methodology. The authors published their original findings in a Journal of Risk and Insurance article ‘The Valuation of Enterprise Risk Management’.

Both RIMS Executive Reports are available in the RIMS Risk Knowledge library at www.RIMS.org/RiskKnowledge.