This website is about the passion for ERM practices and the need to integrate ERM into how business is done. This site aims to promote knowledge sharing and best practices sharing. Currently, the focus is on knowledge sharing with links to written materials on the web to help practitioners in their ERM Implementation irrespective of their industry. The website will include best practices sharing down the road.


This website has four main areas:

ERM in different industries - There are links on web pages for different industries depending on the major risks in each industry.


ERM Tools - Based on experience, these are some of "must have environment", deliverables, tools, approaches and techniques that can accelerate the ERM implementation. These include: Critical to Success Factors, ERM Deliverables, ERM Identification Techniques, ERM Risk Prioritization Techniques, ERM Measurement Techniques for different types of risks, ERM Risk Control Techniques, ERM Risk Monitoring and ERM Risk Reporting.

There is also a consideration of Technology Enablers that will help to sustain ERM. These enablers include Dashboard, Business Intelligence and Enterprise Architectural System.


ERM Videos - This includes videos available on the web that deal with risk topics. The aim of ERM Videos is to deepen the understanding of risk issues.


ERM Blogs - There are two blogs. ERM Blog is for the discussion of risk issues. ERM Q&A Blog is where colleagues can ask questions and get answers from other colleagues around the world.


Please, feel free to provide feedback on how to make the site more productive and also, to suggest what other relevant and useful links to be included.


Thank you for using the links on this site - Stephen Ogunyemi, Ph.D.

Special Information on ERM Navigator Meeting Place

Poor Risk Management of Subprime Loan Portfolios Leads to Global Economic Meltdown

The Blame Game

The blame has begun. The Republicans blame the Democrats for their involvement in Freddie and Fannie. The Democrats blame the Republicans for relaxing the financial regulations. The White House blames the Congress for not passing the necessary rules while the Congress blames the White House for not enforcing oversight.


The rest of the world blames the US. Even our ally, Germany blamed the US. The German Finance Minister Peer Steinbrück in echoing Chancellor Angela Merkel opined that “The United States, and let me emphasize, the United States is solely to be blamed for the financial crisis. They are the cause for the crisis and it is not Europe and it is not the Federal Republic of Germany.”


The Chancellor had earlier argued that the failure by the United to impose more stringent conditions on its banking sector dragged other nations into the credit crisis. She insisted that the Bush administration resisted German attempts to put greater regulation of the financial sector on the international agenda when she was the chair of the Group of Eight industrialized nations in 2007.


With the tax payers´ bailing out every company that can get a news outlet to carry its message, the public is blaming the CEOs. It is now a “sin” for the CEOs to spend money on independent agents who were top performers for their companies.


The Real Blame Belongs to the Risk Managers

There is enough blame to go around but when the final chapter of the current financial crisis is written, that chapter will need to put lots of blame on the Risk Managers. Why will it be the Risk Managers and not the CEOs that take the blame? Financial Services companies are in business because they can take risks. The name of their business is risk.


To be profitable, these companies must be able to write risks within their well thought out underwriting guidelines. It is one of the responsibilities of the CEOs to grow their businesses. The growth of businesses implies growth of risks. It is one of the responsibilities of the CROs and the Risk Managers to manage the risks even before the risks get through the front door or get on the company’s book of business.


What excuses will the Risk Managers in these companies that have failed or that are failing give to their fellow colleagues in other companies?


That these Risk Managers did not know what kind of exposure they were adding to their portfolio with the Subprime deals?


That there is no fore thought and serious analysis of how these Subprime loans will affect their balance sheet?


When these companies started taking on new types of risks, were the Risk Managers still stuck on using the same old approaches of measuring and managing these new risks as if they were like the old risks?


What happened to risk dependencies? What happened to assessment of the risk quantity?

Since the subprime loans started getting on the book, what were the Risk Managers doing until the loans imploded?


What type of risk control approaches were they using? What happened to the monitoring of the risk quality?


Whatever these Risk Managers were doing, there are abundant evidences today that they were not doing the right things. Is this like Monday morning quarterbacking? No!


Example is Citigroup that has lost more than $69 billion within the last few months. The Risk management in Citigroup was supposed to be independent with strong focus on managing the company’s diversities of risks but as Eric Dash and Julie Creswell pointed out, these “risk managers never investigated deeply enough. Because of longstanding ties that clouded their judgment, the very people charged with overseeing deal makers eager to increase short-term earnings - and executives´ multimillion-dollar bonuses - failed to rein them (the company's executives) in”


The Risk Managers will have to take the current financial crisis both as challenges and as well as opportunities. While different stakeholders will analyze the financial crisis differently, what is definitely and hopefully going to happen is that Risk Managers will take the opportunities offered by the financial and risk communities along with the support of G-20 to move the level of managing risks to a new height. – Stephen

Paying Heavy Price for Not Managing the Risks!

Countrywide, WAMU & AIG - Three Collapsed Companies with ERM Programs: ERM in Practice or ERM on PowerPoint?

Lipstick on Pigs

Were Enterprise Risk Management (ERM) programs in Countrywide, WAMU and AIG cases of putting lipstick on pigs? How can these companies claim to have ERM programs and still ended up where they found themselves?


Countrywide has been bought by Bank of America, WAMU has been acquired by JPMorgan Chase and AIG is right now highly dependent on the US government. Are these the indications of where companies implementing ERM will end? To be acquired or dependent on government handout? Hopefully, these companies are just outliers.


Many companies today are attempting to implement ERM as part of how their risk management departments are expected to operate. There are many companies that are very serious in adapting ERM as the way of doing business but there are some that are just checking the box because the Rating Agencies are taking the assessment of ERM as very important. For those companies checking the box, it is not difficult to see some of them already in the failure zone. There are still greater chances that those checking the box will likely fail.


The insistence of the Rating Agencies to assess the quality of a company´s ERM will help many companies to truly engage, implement and benefit from ERM but the hard work of getting ERM right will have to be done by the various companies.


ERM is not for Rating Agencies but for the Companies

For ERM to truly become part of business excellence, serious companies will have to shift their focus of their ERM programs from just meeting the Rating Agencies´ requirements. ERM is more than meeting the Rating Agencies´ requirements!


A Chief Risk Officer once said that her company “undersold” its Strategic Risk Management, Risk Controls and Risk Models components of S&P ERM during a review meeting with the Rating Agency but the truth is that the company is not having a serious ERM program. The issue should not be about making a sale or not. It is about telling the Rating Agencies what the company is actually doing.


In working with a very respected CEO, he offered that there is no need to hype how the company is implementing ERM but to state clearly what the company is doing and what the company is planning to do because at the end of the day, it is not about ERM for the Rating Agencies but for the benefit of the company. ERM is not about selling in a PowerPoint presentation to convince a Rating Agency. It involves a hard work of actually managing the totality of the company’s risks for customer excellence, profits and shareholders’ value. - Stephen

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