What are benefits of pursuing enterprise risk management? How can risk management enhance agency decision-making? What is the mission of the Association for Federal Enterprise Risk Management (AFERM)? Join host Michael Keegan as he explores these questions and more with our very special guest, Tom Brandt, Chief Risk Officer, at the US Internal Revenue Service (IRS).
Ask the Experts
Artificial Intelligence (AI) has moved into the mainstream of businesses and government.
Business leaders are rushing to take advantages of the benefits that can be brought to a wide array of industries to help increase productivity. Government leaders are also moving forward, but with appropriate caution. When considering the use and application of AI related technologies, government leaders weigh different factors than their private sector counterparts. Whether it is deploying self-driving electric trolleys in a city or retrofitting city streetlights with sensors to make them “smarter,” these leaders must address issues of accountability, transparency, ethics, equity, common good, effectiveness, efficiency, managerial capacity, and political legitimacy.
The report authors put forth a threefold strategy to assist government leaders and public managers with how best to approach using AI, which includes:
- reviews of prior federal government studies on the use and application of AI. These reports reflect a number of important issues for agencies and stakeholders to consider as they begin incorporating AI; the studies also highlight the government’s broad risk management approach to AI
- a risk management framework for when and how government can and should consider using AI tools, how to use these tools, and which organizational tasks and decisions may benefit from the use of AI
- case studies of two innovative uses of AI tools to help manage risks from local governments: the City of Syracuse, New York, and the City of Bryan, Texas.
The authors close with a list of practical guidelines for government action in using AI tools to improve the overall quality of governance, while incorporating similar tools into their overall risk management strategy.
In successful organisations, risk management enhances strategic planning and prioritisation, assists in achieving objectives and strengthens the ability to be agile to respond to the challenges faced. If we are serious about meeting objectives successfully, improving service delivery and achieving value for money, risk management must be an essential and integral part of planning and decision-making. While risk practices have improved over time across government, the volatility, complexity and ambiguity of our operating environment has increased, as have demands for greater transparency and accountability for managing the impact of risks. This updated guidance builds on the previous Orange Book to help improve risk management further and to embed this as a routine part of how we operate.
An Imperative for Agency Leaders to Embrace Enterprise Risk Management
Several recent reports and studies have detailed a range of worsening trends and developments that are creating an increased risk for significant government failure. Many of the reports offer recommendations for action by Congress and the Administration. However, they do not go as far to suggest and recognize what agency leaders can do, and in many cases are doing, to help address these challenges. This paper, from the Senior Executives Association (SEA) and the Association for Federal Enterprise Risk Management (AFERM), aims to highlight how agency leaders can use enterprise risk management to reduce the risk of government failure while increasing the likelihood for the successful delivery of agency missions.
A 2017 Summit Presentation by Jennifer Hills, Director, Office of Risk Management, King County, Washington.
This model provides a guideline for risk management professionals – and the organizations that employ them – about the professional knowledge, skills, and abilities that support career development and growth. It also provides guidance for individual development, and describes those accomplishments that distinguish the risk management professional at every level – from those entering the profession through to those entering the boardroom. Use of this model will allow risk management professionals to better understand how to develop and apply the abilities, knowledge, skills and attributes they need to be successful at each stage in their chosen career path.
The RIMS Risk Management Professional Core Competency Model encompasses expected competencies in seven areas: core competencies, attributes, organizational knowledge, business knowledge, risk management knowledge, technical skills and management skills. Knowledge and techniques listed in the skill areas can be learned. Technical and management skills reflect a wide-ranging level of experience.
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has unveiled an update to its Enterprise Risk Management – Integrated Framework and is seeking public comment of the proposal, from June 15 through Sept. 30. The update, Enterprise Risk Management — Aligning Risk with Strategy and Performance, is designed to address the needs of all organizations to improve their approach to managing new and existing risks as a way to help create, preserve, sustain, and realize value.
Link to COSO site: http://www.coso.org/ermupdate.html.