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Typical risk functions

The primary risk functions in large corporations that may participate in an ERM program typically include:

  • Strategic planning - identifies external threats and competitive opportunities, along with strategic initiatives to address them

  • Marketing - understands the target customer to ensure product/service alignment with customer requirements

  • Compliance & Ethics - monitors compliance with code of conduct and directs fraud investigations

  • Accounting / Financial compliance - which identifies financial reporting risks

  • Law Department - manages litigation and analyzes emerging legal trends that may impact the organization
 
  • Insurance - ensures the proper insurance coverage for the organization

  • Treasury - ensures cash is sufficient to meet business needs, while managing risk related to commodity pricing or foreign exchange

  • Operational Quality Assurance - verifies operational output is within tolerances

  • Operations management - ensures the business runs day-to-day and that related barriers are surfaced for resolution

  • Credit - ensures any credit provided to customers is appropriate to their ability to pay

  • Customer service - ensures customer complaints are handled promptly and root causes are reported to operations for resolution

  • Internal audit - evaluates the effectiveness of each of the above risk functions and recommends improvements.