The Importance of Enterprise Risk Management in a Pandemic

  • Reducing Risk
  • 2/18/2021
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As organizations enacted preparedness and business continuity plans throughout COVID-19, the importance of risk management became clear. Understand how an effective ERM program can help you react and adjust to emerging risks.

Key insights

  • Risk management helps protect you from future events, but it also can help you reassess practices put in place during the pandemic.
  • Reevaluate processes that were created quickly to help improve your organization’s efficiency.
  • Implement specific tactics to help your organization remain efficient in a remote environment.
  • Reimagine your business practices with the learnings gained from the past year.

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COVID-19 has changed how business is conducted. As organizations enacted preparedness and business continuity plans, enterprise risk management (ERM) has become more important than ever. With this transition to a teleworking environment, new risks emerged and existing risks were reprioritized, which elevated the need for proper risk assessment.

Let’s take some time to answer the question that comes next: what does an effective ERM program look like in the age and aftermath of COVID-19?

Changes to processes and controls

As stabilization begins and a new normal emerges, reassess processes and controls that were hurriedly changed to locate possible gaps in control environments and security structures. Consider developing different operating plans and procedures for a host of scenarios — such as a pandemic, natural disaster, severe weather, terrorism, cyber event, etc. These plans should be vetted and tested so your organization is comfortable in its ability to operate smoothly with proper checks and balances in any scenario.

The future of remote work

Many organizations were jolted into a remote work environment due to the pandemic, and the transition might have seemed easier than anticipated.

However, after nearly a year, there are still some challenges. Remote employees may find it difficult to separate home from work, establish boundaries, and stick to a normal work routine. Some employees have trouble unplugging, while others have distractions at home that make it hard to work efficiently. Others may overcompensate and respond to work emails and calls during off hours to appear more visible.

To broaden the lens beyond the individual, team communication and collaboration might suffer when employees can’t meet in person to work through a problem. New employees are unlikely to experience the same camaraderie as they would in person, which could lead to feeling less connected to their fellow employees and the organization at large. Lastly, technology issues can not only impede employee productivity, but also put the organization at risk if the remote environments do not have adequate safeguards in place.

While remote work has brought its challenges, there is hope from model examples. For some, remote work may even become a permanent structure. Establish new procedures to effectively monitor and evaluate employee productivity, as well as to provide support to employees at risk.

Keys to success

Consider ways your organization can create a successful and lasting remote work environment:

  • Develop standards and policies to create a secure network environment for your employees.
  • Communicate clear expectations to employees regarding schedule, dress code, and deadlines.
  • Consider the equipment and items employees need to work productively (e.g., monitors, printers).
  • Find ways to increase collaboration and sense of community through video meetings, regular check-ins, and coaching.
  • Hold periodic in-person gatherings (when it’s safe) to facilitate face-to-face interactions.

The pandemic has given organizations the chance to reevaluate their entire business, streamline processes, and completely transform, if necessary. Use this opportunity to focus on the major obstacles you faced early in the pandemic and identify the constraints and processes that worked well (or didn’t). This information is invaluable — you can now reimagine and reinvent what the future can and should look like. And if you do, you may emerge from this stronger than before, with more agility as you adjust and react to emerging risks.

How we can help

Before COVID-19, ERM assessments may have been an annual or quarterly evaluation, but now the importance of a robust ERM process is clearer than ever. This is where ERM professionals come in — they can help you respond to the current crisis, protect employees, react to the ever-changing environment, and provide guidance on how to operate your organization effectively.

CLA can help your organization react quickly and mitigate emerging risks on a continuous basis. If you’re in need of a team to guide you through the ERM process, contact us.

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