Question

Contrast and compare the different approaches to building a comprehensive strategic risk management process.

Answer 1

Traditional Risk Management	Enterprise Risk Management
Segmented / Departmentalized	Holistic approach
Each department/business unit/silo deals with own risk	Emanates from the "top" – typically the Board of Directors
Little or no knowledge of overall organizational risks.	Broad perspective on overall organizational risks.
Focus is on preventing loss within the business unit (tactical).	Focus is on lowering risk, increasing sustainability and providing savings/value across the entire organization (strategic).
Manages uncertainties around physical and financial assets.	Assesses entire asset portfolio including intangibles such as customers, employees, suppliers, innovative processes, proprietary systems.
Solutions to mitigating risk based on each silo's expertise and decision-making skills.	Solutions to mitigating risk based on strategy-setting across the entire organization.