Integrated Framework for Enterprise Risk Management

COSO (The Committee of Sponsoring Organizations of the Treadway Commission) is an American organization that encourages efficient practices and education to promote the transparency of organizations. COSO II is guideline put out by the Committee that discusses and gives suggestions for how best to implement an enterprise risk management program. The guideline presents an integrated risk management program as a process that consists of eight elements – Internal Environment, Objective Setting, Event Identification, Risk Assessment, Risk Response, Control Activities, Information and Communication and Monitoring – and can apply to any type of business.

Impact

Primarily focusing on business and insurance in terms of application, COSO II can also apply to other industries. A broad standard that focuses on risk objectives and how to achieve them in an integrated way, COSO II is a framework that can serve as a jumping-off point for organizations that want to implement an enterprise risk management program. Main types of objectives of a risk program, according to COSO, include:

•     Strategic – high-level goals, aligned with and supporting its mission
•     Operations – effective and efficient use of its resources
•     Reporting – reliability of reporting
•     Compliance – compliance with applicable laws and regulations

Challenge

Implementing an enterprise risk management program can be challenging – risk management often occurs in silos, particularly in complex, international facilities/organizations. Different terminology, different risk rankings, different ways of categorizing risk, and outdated, non-specialized software can make an integrated framework difficult to achieve. Following COSO’s guidelines, with the help of a dedicated enterprise risk management software solution, can aid executive teams in clearly stating desired outcomes in reducing risk, and can ensure that a standardized, comprehensive risk management program is being executed.

The Dyadem Solution

Dyadem helps companies establish an enterprise risk management program and comply with various industry regulations and standards.  Its Stature enterprise software aligns closely with the COSO II framework, enabling companies to identify, mitigate and monitor risks across the organization through a continuous improvement approach that allows them to learn from their mistakes and better predict future risk.  Stature offers an integrated lifecycle model that ensures all parts of the process and product are safe and secure from cradle to grave. With a standardized, comprehensive approach to risk management, COSO II and Dyadem can ensure any organization is better able to predict and control potential risk.