Article

The Importance of Enterprise Risk Management in a Pandemic

Before the COVID-19 pandemic hit, ERM assessments may have been an annual or quarterly evaluation. The pandemic has reaffirmed the importance of a robust ERM process to ensure organizations are able to react quickly and mitigate emerging risks on a continuous basis.

Learn More
< Back to Insights
Insights  <  The Importance of Enterprise Risk Management in a Pandemic

Before the COVID-19 pandemic hit, ERM assessments may have been an annual or quarterly evaluation. The pandemic has reaffirmed the importance of a robust ERM process to ensure organizations are able to react quickly and mitigate emerging risks on a continuous basis.

COVID-19 has changed the way organizations conduct business. As organizations have been forced to enact preparedness and business continuity plans, Enterprise Risk Management (ERM) is more important than ever before. Risks that might not have been as high on the risk register have now risen to the forefront as organizations scrambled to move to a teleworking environment. While some organizations have had to create plans on the fly in order to keep operations running, the need to properly assess emerging risks has been elevated to a critical level.

ERM professionals can help organizations respond to the current crisis to ensure employees are protected, the business can operate, and management can react to the ever-changing environment.

What does an effective ERM program look like in the age/aftermath of COVID-19 and what steps are they taking?

Changes to Processes and Controls

As the current environment begins to stabilize, organizations will need to assess what the new workplace looks like. Processes and controls that were changed need to be evaluated and reassessed for gaps in the control environment and security structure. Organizations may consider developing different operating plans and procedures for a host of different scenarios – such as a pandemic, natural disaster, severe weather, terrorism, cyber event, etc. These plans should be vetted and tested to ensure the organization could operate smoothly with the proper checks and balances in any scenario.

Remote Work Going Forward

Remote work may be a permanent structure for some personnel and new procedures will need to be established to monitor and evaluate employee productivity as well as provide support to employees at risk. The sudden transition to remote work that many organizations executed during the pandemic seemed easier than anticipated.

However, many organizations are beginning to experience some challenges with their employees working remotely. For some, it is difficult to separate home from work, establish boundaries and stick to a normal work routine. Some employees have trouble unplugging, while others have many distractions at home that prevent them from working efficiently. Others may overcompensate and respond to work emails and calls off hours, so they appear visible.

Communication between team members may feel fragmented and collaboration may suffer when employees can no longer congregate in a room to work through a problem. New employees will not experience the same comradery as they would in person, which could lead to feeling less connected to the organization. Lastly, technology issues can impede employee productivity and could put the organization at risk if the remote environments do not have adequate safeguards in place.

Some organizations have found ways to ensure successful remote work environments. Key items to consider include the following:

  • Develop standards and policies to ensure employees are working in a secure network environment
  • Communicate clear expectations to employees regarding schedule, dress code, and deadlines
  • Provide equipment and items needed for employees to work productively, such as monitors, printers, etc.
  • Find ways to increase collaboration and sense of community through video meetings, regular check-ins, and coaching
  • Hold periodic in-person gatherings (post-COVID) to facilitate face-to-face interactions

The pandemic has provided organizations with the opportunity to reevaluate their entire business—which presents opportunities to streamline processes and transform.  Processes that failed during the current pandemic can be reinvented. Organizations can use this situation to prioritize the major obstacles they faced early on in the pandemic and identify the constraints and the processes that worked well or failed. This information is invaluable and should be used to imagine and reinvent what the future state can and should look like during and after the recovery. There is an opportunity to emerge from the current crisis stronger and with the agility to adjust and react to emerging risks.

Before the COVID-19 pandemic hit, ERM assessments may have been an annual or quarterly evaluation. The pandemic has reaffirmed the importance of a robust ERM process to ensure organizations are able to react quickly and mitigate emerging risks on a continuous basis. Click here to learn more about how blumshapiro can help your organization properly assess its business risks during this new normal.

Continue the Conversation with Our Team
Get in touch with us.

Contact Us