If culture cannot come to compliance, then compliance must come to culture. Part III of III (read earlier Thought Leadership articles for the complete holistic structure of ethtics and integrity leadership)
When a corporate fraud or scandal is revealed, what shocks the stakeholders most is often the bold defiance and deliberate deception by senior management, followed by the lack of governance, oversight and finally the disclosures of the management inaccuracies that allowed it to happen
Connecting business strategy to enterprise risks.
Traditional Enterprise Risk Management (ERM) based approach tends to dwell on the most obvious vulnerabilities–that are often not linked to the business strategy. Therefore in the conventional risk management processes, these are rarely identified. Therefore significant opportunities that can lead to growth, profits and competitive advantage are missed.
The fact that when the ERM program and processes are performed on a top-down basis, the primary attention is on the high risks related to the execution of the strategy with the underlying focus on value protection, rather than value creation.
If the holistic component is added, then there is a likelihood that ERM practices, will assess the risks when they occur, requiring Risk Officers to anticipate the possibilities of what may happen instead of repeating what happened in the past.
Cultivating the orderly force of disruption
This approach includes the new and changed risks by identifying potential threats from new business conditions and other issues that can transform the performance of the business.
Therefore when connecting business strategy to enterprise risks, the Risk Officers can cultivate a holistic discipline and process to identify and address risks that threaten to disrupt the underlying assumptions that are at the core of a company's strategy.
Building a Strategic Risk Competence
Risks related to ethics and integrity issues are often difficult to control and measure when these are related to brand reputation, competition and innovation. An annual assessment or workshop can update the current risk governance program that often is introverted with checking the box and forms instead of being insightful on the new strategic risks that are always looming on the horizon.
Optimising the risk-management process
These ethics and integrity workshops can capture the new trends by identifying and monitoring those particular strategic risks, track external trends and by performing scenario planning exercises' control the processes by deploying enhanced holistic processes.
Using the Copenhagen Compliance® approach the primary results of these workshops can build proper ethics and integrity capabilities within the organisation to address the strategic risks efficiently and create a framework for future reference:
- Creates a bigger scenario to view and address risks that connect business strategy to enterprise risks
- Embed the practice of questioning strategic assumptions by challenging current market doctrine
- Cultivate a risk-sensing mechanism in the processes to identify potential threats and opportunities
- Align enterprise risk management with strategy and scenario planning.
- Move towards an annual measurement and quantification of risks by assessing, managing and monitoring risks.
- Ensure an analytic and balanced risk culture based on governance, ethics and integrity.
- Integrate risk management into the day-to-day operations, where major decisions are evaluated based on the coherent strategic risks.
The Copenhagen Compliance® methodology on performing the annual Ethics and Integrity review is a check-up of the strong corporate governance culture to create the basis of a reputational and business advantage. The assessment is based on the fact that business done on ethical principles in general often creates sustainable value for all stakeholders.
To get a comprehensive risk picture, consider reading part I and II, before proceeding with an internal workshop. For more details see: http://www.copenhagencompliance.com/Responsible-Ethics-&-Integrity-Brochure.pdf
