In the US, there are a number of Enterprise Risk Management (ERM) developments:

• US Feds are requiring ERM in all federal departments.
• Feds are pushing ERM to states that have federal funding.
• Fed are thinking of putting ERM into enforcement and contracts.

US States are seeing the ERM trend.  So, state governors are using executive orders to mandate ERM in all state agencies much like what the US government is doing with its departments.

WASHINGTON STATE ERM

Why did Washington State adopt and even force all state agencies to implement ERM.? Good question.

There is risk in the design and delivery of all state services from protecting vulnerable children, building bridges, or upholding the law.  The governor’s order said:

“agencies that provide these and other critical services need to manage risks in order to best serve the citizens of the state, while reducing the risk of harm and managing limited state resources; …  managing risk cannot be done by any one individual, department, or agency but must be ingrained in all state agencies at all levels”

MIGRATION TO ERM

Safety and liability were traditionally the critical concerns for state government to adopt risk management.  But, risk management often was tactical.  The risks that state agencies and organizations now focus are often systemic, chronic, material, and even global.  A different approach was needed – one that focused on the organization.

The State of Washington hence wanted to “embed ERM in all levels of the agency and analyze risks when making decisions.”  The goal was to:

“Allocate resources, to the greatest extent feasible, to services for which the state is at greatest risk of liability, with the goal of preventing or mitigating loss while meeting service expectations and responsibilities. In doing so, agencies should: (1) among information systems, technologies, and funding requests, prioritize those that support high-risk services and serve to mitigate risk; and (2) within available resources, prioritize training for service delivery staff and supervisors relevant to reducing losses and significant claims.”

ERM also is being linked to “all aspects of employee performance, including holding people accountable for agreed-upon performance expectations.”

Times, they are a’changing.

Bio:

Greg Hutchins PE and CERM (503.233.101 & GregH@QualityPlusEngineering.com)  is the founder of:

CERMAcademy.com
800Compete.com
QualityPlusEngineering.com
WorkingIt.com

He is the evangelist behind Future of Quality: Risk®.  He is currently working on the Future of Work and machine learning projects.

He is a frequent speaker and expert on Supply Chain Risk Management and cyber security.  His current books available on all platform are shown below: