“Risk is simple: It comes from something you do or don't do and from something someone else does or doesn't do."
- Risk Oversight: The Board's Role in Risk Management, NRECA Course 921.1
The electric industry has always been complex. As the pace of change to this complex industry continues to increase, managing risk becomes even more important. In the continuing effort to improve cooperatives' enterprise-wide controls and governance, NRECA offers Enterprise Risk Management (ERM) consulting services.
As this complexity and pace of change continues to increase, the responsibilities of boards of directors, managers, auditors and senior executives increase as well. These leaders are tasked with designing and implementing effective enterprise risk management systems to protect and enhance the co-op's accountability and value. Forward-thinking CEOs and boards are looking for tools that will help them manage risk more effectively across the enterprise. NRECA's ERM consulting service was created to meet this growing need.
What Is ERM?
Think of ERM as an umbrella that provides management with a clearer, wider view and protects the organization. It is an overarching management process that provides a methodology, a common language and a set of standards to identify, evaluate, prioritize and manage risks inherent in an individual organization's operations.
A robust ERM program can:
- Improve the culture, enhance communication, promote more productive cross-department working relationships and improve decision making and resource allocation.
- Provide a comprehensive process to identify, evaluate, prioritize and manage ongoing risks that are inherent in operations.
- Provide a common language for use in analysis and discussion.
How We Work with You
NRECA Consulting Services can assist in the development of an individual risk management structure that will facilitate the identification of critical risks, provide a means to establish risk management assessments and priorities and develop a process to manage the unique threats and opportunities your organization faces.
NRECA's ERM services offering is based on four basic premises—ERM should be: simple, scalable, comprehensive and continuous.
Simple: The risks and discussions involved in ERM can be complex and comprehensive; but the process must remain simple and easy to use.
Scalable: All risk profiles are different; an effective ERM process will adjust to the unique and changing circumstances an organization faces.
Comprehensive: ERM must be used across all departments and in all decision making. Not every risk is tracked, but all risks, at least initially, must be identified, assessed and “ownership" must be established.
Continuous: ERM must become a regular, ongoing part of Board and management's duties.
While this may seem daunting, getting started is the most important step, and we can help. Whether you're a small distribution co-op or a large, complex G&T with multiple energy sources, we can help you develop and implement a simple, effective and sustainable enterprise risk management process. Call us for a free consultation to learn more.