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Preventing Another Financial Catastrophe with Enterprise Risk Management 1/26/2009

RIMS executive report outlines next steps for ERM

NEW YORK (January 26, 2009)  The Risk and Insurance Management Society (RIMS) released an executive report today titled "The 2008 Financial Crisis: A Wake-up Call for Enterprise Risk Management," petitioning a call to action for enterprise risk management.

"This is an imperative that saysin order to prevent another financial catastropheorganizations must change the way they think about risk and consider implementing an enterprise risk management program, or improve the one already in place," says Joseph A. Restoule, CIP, CRM, RIMS president and leader of risk management at NOVA Chemicals Corporation. "RIMS believes that the key to successful ERM practices depends on certain behavioral attributes of the organization at all levels."

In the executive paper, RIMS contends that there were a number of behavioral breakdowns that contributed to the financial crisis. These failures include the over-use of financial models, the over-reliance on compliance and controls, the failure to understand risk tolerance and the failure to embed risk management within the organizations. Additionally, there was no governance failsafe built into risk management frameworks.

"The 2008 Financial Crisis: A Wake-up Call for Enterprise Risk Management" is available at RIMS Resource Library at www.RIMS.org/ERMwhitepaper.


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About RIMS

As the preeminent organization dedicated to advancing the practice of risk management, RIMS, the Risk Management Society™, is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities throughout the world. Founded in 1950, RIMS brings networking, professional development and education opportunities to its membership of more than 11,000 risk management professionals located in more than 60 countries. For more information on RIMS, visit www.RIMS.org.

 

For more information, contact:

Josh Salter, RIMS communications manager, (212) 655-6059 or jsalter@RIMS.org

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