Many risk-management activities at the enterprise level are driven by regulatory change. While we do help clients achieve full regulatory compliance, we also help them further develop the risk-management capabilities they need based on their strategic and economic priorities and aspiration level—ultimately helping them make better business decisions and increase the value of their companies in a risk-conscious way.
Our recent work includes supporting large and broad multiyear risk-transformation programs at financial institutions as well as nonfinancial corporations (such as energy and oil companies), helping clients develop specific risk capabilities on high-priority topics (such as setting the risk appetite or conducting stress tests for banks), and supporting clients in a variety of industries—including automotive, pharmaceuticals, and travel—in identifying and managing M&A risks, portfolio “de-risking,” and balance-sheet management.
Our approach to enterprise risk management (ERM) focuses on five dimensions:
Risk transparency and insight
We help clients identify, quantify, and prioritize their most important risks. We do this using a combination of qualitative discussions, quantification methods (such as analytic modeling and stress testing), and forward-looking risk reporting supported by comprehensive data and robust IT solutions.
Risk appetite and strategy
Companies choose to take on different types and levels of risk. We help clients understand their unique financial and strategic circumstances, so they can ensure that their risk choices align with their corporate strategy and risk-taking capabilities.
Risk-enabled business processes and decisions
When making major strategic decisions—about capital allocation, for example—companies must consider risk information and risk trade-offs. We help clients integrate risk management into their strategic-planning processes as well as into their day-to-day operations and decision making (for example, contracting and pricing).
Managing risk is the responsibility of the entire organization—not just of one function within the company. However, the right structural and organizational choices are critical to ensuring robust and effective enterprise risk management. We help clients define the roles and responsibilities of central (and, if applicable, business-unit-level) risk functions and how they should interact with other parts of the organization.
Mind-sets and behaviors play a crucial role in the execution of a company’s risk strategy. We help clients get clarity on specific cultural challenges within their organization and support them in creating structured interventions to address these challenges.
Selected tools and resources
We use a combination of proprietary data and unique tools to assess, benchmark, and improve our clients’ ERM capabilities. For example:
We conduct a holistic assessment of the effectiveness of enterprise-wide risk management. This cross-sector framework allows for prioritized deployment of specific tools and approaches (such as strategic scenario planning, stress testing, or risk-appetite definition) in the areas of greatest need, thereby helping a client improve its ERM practices.
Risk 360 Diagnostic and Benchmarking Tool
Enables a holistic assessment of the efficiency, effectiveness, and structural soundness of a company’s risk organization. It also allows for peer comparison.
Assesses an organization’s mind-sets and behaviors as they relate to risk management, identifying cultural strengths as well as opportunities for improvement.
Compliance Health Check
Helps clients test for compliance in their particular industry. Also available are a series of industry-specific tools for certain compliance areas (such as Business Partner Management or Gifts & Hospitality).
Cash Flow at Risk (CFaR) model
Our offerings in advanced risk analytics and data modeling helps companies—particularly those exposed to commodity and currency volatility and long-term uncertainty—understand their risk exposures and risk capacity.