Creating a Culture of Risk Management in the IRS

The RIMS Strategic and Enterprise Risk Center presents: 2022 Melissa Reynard Director of ERM at the Internal Revenue Service

In November 2021, RIMS presented the Internal Revenue Service with the society’s 2021 ERM Global Award of Distinction. The IRS was honored for its progress in anticipating emerging risks, the steps it took to create a more risk-aware culture, and ultimately developing an ERM structure to enhance risk sharing and strategic decision-making.

The honor was well deserved, as so much needed to be accomplished and implemented against the backdrop of an extended government shutdown, sweeping tax reforms and significant operational disruptions within the IRS itself caused by the COVID-19 pandemic. The government agency’s ERM program assisted its resilience amidst mounting uncertainties and vulnerabilities.

To learn more about the ERM program, we met with Melissa Reynard, director of ERM at the IRS, who was on site to receive the award at the RIMS ERM Conference 2021. Reynard has served in the position since January 2020, and previously was a senior risk advisor in the IRS Office of the Chief Risk Officer, a role she assumed in 2014.

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‘Poor culture can undermine … trust and confidence. By contrast, good culture, which is more conducive to good conduct, helps maintain trust and confidence.’ John Price, ASIC Commissioner

‘Many discussions of the crisis have explored how firms’ varying risk cultures have strongly affected their response to the building up of risk before the onset of market turmoil, or to the strains of coping with the crisis, or both’. (IIF, 2009)

‘It’s important to have a continuous focus on culture, rather than wait for a crisis. Poor behaviour can be exacerbated when companies come under pressure.’ Sir Winfried Bischoff, Chairman, UK Financial Reporting Council

Risk Culture needs to operate in a way that incorporates cognitive, organizational, environmental, contextual and technological demands in an interdisciplinary manner.

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