|
|
RIMS PRESS RELEASES
|
Test: Standard and Poors Article
|
3/25/2008
|
Sam Torian
In November 2007, Standard & Poor's (S&P) issued a request for comment from the risk community on plans for an Enterprise Risk Management Analysis for Credit Ratings of Nonfinancial Companies. On February 29, the Risk and Insurance Management Society (RIMS) provided feedback to Standard & Poor's expressing conceptual support of the proposed ERM analysis, while providing concerns and recommendations regarding potential implementation and resource issues in applying the proposed framework.
Overall, RIMS commends Standard & Poor's work over the past few years for the positive effect it has had on the risk management discipline by raising the visibility of ERM within businesses. While RIMS does not advocate the use of one ERM framework over another, the Society congratulates S&P in its work to date and its forward-thinking approach for recognizing the value of ERM in evaluating the credit quality of a broad cross-section of companies.
RIMS believes that Standard & Poor's could effectively introduce ERM criteria into rating nonfinancial companies, and has provided the comments to assist in this effort. RIMS supports S&P's adoption of an ERM framework as a component of its ratings reviews because it believes that a well-implemented ERM program is characteristic of a well-managed company, and does indeed enhance an organization's credit quality to investors and shareholders. The S&P assessment framework provides certain structural requirements for an ERM program, but RIMS sees opportunities to improve it. RIMS encourages S&P to consider whether its framework and evaluation process is flexible enough to fit any given company's culture and management style, particularly with S&P's apparent focus on applying a sector-specific platform. RIMS asks that S&P consider carefully the different operating perspectives of financial institutions and nonfinancial companies, and take these differences into account as it transitions the assessments for nonfinancial companies.
RIMS suggests that Standard & Poor's consider a continuum of ERM maturity in assigning its ratings, and offers its Risk Maturity Model as a tool for consideration. RIMS looks forward to continuing to work with S&P in order to accelerate ERM best practices across all industries. To read RIMS complete comments on Standard & Poor's Enterprise Risk Management Analysis for Credit Ratings of Nonfinancial Companies, click here.
If you would like to speak with RIMS about our comments to Standard & Poor's, please contact Felicia Messimer, RIMS communications associate, at (212) 655-6059 or fmessimer@RIMS.org.
# # #
About the Risk and Insurance Management Society, Inc.
The Risk and Insurance Management Society, Inc. (RIMS) is a not-for-profit organization dedicated to advancing the practice of risk management, a professional discipline that protects physical, financial and human resources. Founded in 1950, RIMS represents more than 4,000 industrial, service, nonprofit, charitable and governmental entities. The Society serves more than 10,700 risk management professionals around the world. For more information, visit www.RIMS.org. |
Contact:
For more information, contact:
Debbie Girard, RIMS communications manager, (212) 655-6004 or dgirard@RIMS.org
Felicia J. Messimer, RIMS communications associate, at (212) 655-6059 or fmessimer@RIMS.org |
Return to main Press Release page
|
|