Maximizing the Return to Risk Ratio
A number of recent economic events, from insider trading problems and financial scandals to the dot-com crash and the passage of Sarbanes-Oxley, have led companies to think more seriously about risk reduction and management, and in many cases, to create the new position of Chief Risk Officer (CRO). Industry statistics show that since 1997, the number of CROs in US businesses has increased ten-fold, with over 50 percent of those positions added in the last three years.
What remains unclear are the roles, responsibilities and charters for a CRO as well as the skill set needed to serve as a successful CRO. Many companies consider the CRO’s primary charter to be protecting the organization and its shareholders from risk. However, the goal of business is not to reduce risk, but rather to maximize the return-to-risk ratio.
Course Description
BMG’s one-day CRO Program is designed to introduce executives and senior managers to the role of the CRO and to offer insight into methods for effectively reducing losses, increasing revenues and lowering expenses by shifting from a risk reduction mentality to a return-to-risk maximization approach.
By combining methodology-based tools such as those used in Six Sigma, with proven risk management techniques, companies can learn how to better predict success and minimize variation. The outcome is better risk management across multiple business areas and a culture dedicated to predictive modeling rather than “gut reactions.”
Agenda
BMG brings its expansive knowledge in methodology-based performance improvement programs such as Six Sigma, Lean, DFSS and TRIZ to the world of Risk Management, giving executives a methodical, practical and measurable approach to better decision making based on an understanding of risk.
Senior leaders will learn the basics on how to create and manage an enterprise-wide risk management system that results in increased asset protection, better liability management, higher customer satisfaction and more effective cost reduction, all balanced with company growth and improved profitability. Topics covered include:
1. Understanding the nature of risk
2. Definition of the different types of risk
3. Approaches and barriers to risk assessment
4. Strategies for managing risk
5. What an enterprise risk management program looks like
6. The role of technology in managing risk
7. Resources available to CROs
Key Learning Outcomes
At the end of this seminar, participants will:
- Better recognize the difference between mitigating risk and maximizing a return-to-risk ratio.
- Understand how to manage uncertainty.
- Know how to define risk in financial terms.
- Be able to implement new strategies for minimizing risk.
- Understand the role of the CRO in driving a culture of business risk management.
- Know what criteria to consider when fulfilling the job position of CRO.
At a Glance Course Length: 1 day.
Who Should Attend:
This program is designed for Chief Risk Officers, CEOs, CFOs or other executives that manage risk or that are considering the creation of this new role.