The American Productivity & Quality Center (known as APQC), a non-profit organization that focuses on business benchmarking, best practices, and knowledge management research, surveyed CEOs and leaders of finance, operations, treasury and internal audit at 96 global companies late last year.
Only 26% reported extensive organizational involvement in enterprise risk management (ERM), the business process that identifies risks, assesses their impact, tracks their occurrence and implements action steps to mitigate or avert their effects.
“ERM remains work in progress at most organizations,” says the APQC report, which also notes that only 19% of respondents judge their ERM process to be effective in identifying risks that their company has not yet encountered, but could experience in the future.
What to do? APQC recommends seven best practices under three stages of the ERM process. In the infographic below, the three stages (read from the roots of the tree upward to the leafy canopy) are the establishment stage, the cultivation stage and the refinement stage.