Risk is a component of daily life. Whether it is a supply chain, technology, infrastructure, airport security, housing, or hospital, there is a need for organisations to manage risks effectively to achieve their goals and objectives.
Risk management is the process of proactively identifying, analysing, and mitigating risks, which enables organisations to foresee emerging threats and develop strategies to minimise the impact. Whether it is the COVID-19 pandemic, the Ukraine-Russia war, the crisis in Sri Lanka or a series of external shocks that the world has witnessed over the years, including corporate governance issues or the 2008-09 financial crisis, organisations have learned the importance of holistic risk management, which goes above and beyond finance or insurance.
Consequently, Enterprise Risk Management (ERM) (which includes environmental, social, governance, geopolitical, technological, and financial risks) has emerged as one of the best opportunities in a world with increasing uncertainties and interconnected events.
What is Enterprise Risk Management?
ERM applies across sectors such as manufacturing, pharmaceuticals, retail, supply chain, etc., as well as across roles and functions, such as sales, procurement, legal, research and development, marketing and human resources. Consequently, professionals who aspire to start their own risk consultancy business can advise and support clients across any sector or industry given the regulatory mandates and disclosure requirements on ERM and risk management (including ESG) from SEBI, RBI, IRDAI, MCA and others.
What Does a Certified Enterprise Risk Management Consultant Do?
An enterprise risk management consultant is an advisor who supports small, medium and large organisations in identifying, assessing and mitigating risks including developing a detailed enterprise risk management policy. Certified ERM consultants carry significant expertise in complex problem solving, implementing global standards and frameworks, analytical thinking, negotiation and stakeholder management whilst they seek to build risk-intelligence across the value chain. They provide organisations with the required capacity to improve corporate assurance frameworks and internal controls while identifying risky opportunities and handling the companies’ hazards and also help in complying with local risk regulations.
Why Do Companies Need Qualified Consultants for ERM?
ERM consultants have a crucial role to play in enhancing organisational success through the identification of potential uncertainties/risks/crises, assessing these events and then developing response strategies to reduce the impact and likelihood of these events. Enterprise risk consultants work with the Chief Risk Officer / Risk Committee / Risk Champions in developing a risk appetite statement (including risk tolerance and risk capacity) which can be reviewed every year. A risk appetite statement defines the amount of risk an organisation is willing to take.
A certified ERM consultant helps organisations develop resilient and sustainable business models. A company without an ERM strategy is vulnerable to a range of risks and prone to losses. However, a qualified ERM expert can integrate best practices from the industry, drive cultural change towards risk-based thinking, enhance the quality of risk registers, create mechanisms to stress test controls, conduct risk brainstorming workshops, improve regulatory disclosures, implement the latest techniques like scenario planning and horizon scanning and ensure adequate preparedness for unforeseen circumstances and catastrophic risks and crises.
With the accelerated adoption of technology over the past few years, the number and ways of cyberattacks and data breaches are increasing by the day. As a result, it is becoming more challenging to predict new cyber threats and stay ahead of them. A qualified ERM consultant with a qualification in Digital Risk Management possesses the expertise to identify and manage these new-age digital issues as well.
How to Become a Certified Enterprise Risk Consultant?
Candidates who wish to become a Certified Fellow need to complete five levels. All levels after Level 1 provide candidates with professional designations that are recognised across the world with access to a global community of enterprise risk experts.
There are two routes to Level 4, which awards the designation CMIRM (Certified Member of IRM) and allows successful candidates to use the title Certified Risk Professional. Professionals should have completed IRM’s Level 3 examination in India with a minimum of three years of practical experience in a risk role, as well as at least 30 hours of Certified Professional Development (CPD) activities annually.
Alternatively, if a professional holds a senior strategic and decision-making role and has at least eight years of relevant experience, they are eligible to apply directly for CMIRM through the senior executive route. There is no examination at this level, however, as a Certified Member, IRM professionals are required to adhere to IRM’s global Professional Code of Conduct and meet the requirements of IRM’s CPD scheme.
IRM’s Level 5 offers the designation CFIRM (Certified Fellow of IRM). Eligible professionals should have had held the CMIRM designation for at least 2 years, have a minimum of eight years of risk management work experience, and should have completed 30 hours of CPD activities in the year prior to applying.
The Digital Risk Management qualification — developed in conjunction with Warwick University (UK). It helps candidates acquire an understanding of risk management in a digitised world and equips them with the knowledge to apply risk management concepts to successfully identify, assess, and mitigate digital risks throughout organisations. Examinations are conducted twice a year, in June and November.
IRM’s Supply Chain Risk Management qualification equips candidates with the knowledge of supply chain operations and the risk implications of ongoing developments from both public and private perspectives. It enables professionals to understand supply chain challenges in the contemporary context of complexity, interconnectedness, and value-added networks, as well as address supply chain risks in alignment with the concepts of sustainability, urbanisation and Industry 4.0. Examinations for the Supply Chain Risk Management qualification are also conducted twice a year, in June and November.
Starting a business has two advantages — it allows individuals to set up an entrepreneurial venture, and it also enables them to contribute to India’s economic development through job creation. Employment poses the greatest development challenge to the country, with the need to create 100 million more jobs by 2030. Entrepreneurship is one solution for this, however, investment in human and physical infrastructure is a key influencing factor. A Certified Enterprise Risk Consultant has the advantage of being able to run their own consultancy business with minimal physical infrastructure while also being able to contribute to employment creation, as the company grows and adds employees.
In the current global economic climate, volatility and uncertainty reign supreme, and many more enterprise risk management practitioners will be needed to steer organisations successfully towards business growth. There is, consequently, a lot of potential for Certified Enterprise Risk Consultants to create tremendous value for the Indian economy by setting up their own risk consultancy after completing the IRM’s gold standard ERM qualifications.
