Effective risk reporting means “having the intelligence at your fingertips but exercising the judgment to report only what your company needs,” said Elizabeth Abraham, Director of Professional Services at MetricStream, and the second of two presenters at the June 16, 2015, webinar on Effective Risk Reporting sponsored by the Global Association of Risk Professionals.
“Lack of clarity about the reporting objective” is a common barrier to effective enterprise risk management reporting, she said. Make sure you understand what level of information the audience wants.
“Data model inconsistencies can lead to an inability to aggregate” the risk estimates, and that’s another barrier. Later, in response to a question from the audience, Abraham clarified that the aggregation in a risk reporting system comes about when the information is always connected to a common framework, even though it is input by different groups.
Sometimes the dataset is massive, and you have to distill the information into something smaller and more meaningful. Lack of alignment with strategic objectives and an inability to capture opportunities (viewing them only as threats) are also common barriers to good reporting, she said.
There’s a variety of methods to display and report risk intelligence for business performance, and she showed a few examples: reports and dashboarding; advanced data visualizations; plug ‘n’ play analytics; and colourful displays of key risk indicators and key performance indicators. Heat maps are a popular way to convey information to the Board of Directors on high-level risks associated with the business.
Abraham distinguished between the type of reporting preferred by CEOs, and by CFOs. She showed several examples of output visuals. Recent developments permit enhanced visibility using real-time risk metrics. ª
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