"Enterprise risk management" may be the hottest topic in the business community, yet it might also be the most misunderstood, with little consensus regarding philosophy, methodology, or even an agreed-upon definition of the term.



To address this lack of accord or consistency, Deloitte & Touche LLP has released a new whitepaper, "The Risk Intelligent Enterprise: ERM Done Right." Within its pages, the concept of Risk Intelligence is introduced and associated best practices are discussed.

Most importantly, the defining characteristics of The Risk Intelligent Enterprise are outlined, including:

-- a risk management philosophy that focuses not solely on risk avoidance, but also on risk-taking as a means to value creation

-- risk management practices that encompass the entire business, creating connections between the "silos" that often arise within large, mature, and/or diverse corporations

-- risk management strategies that address the full spectrum of risks, including industry specific, compliance, competitive, environmental, security, privacy, business continuity, strategic, reporting, and operational

-- risk assessment processes that augment the conventional emphasis on probability by placing significant weight on the notion of vulnerability

-- risk management approaches that do not solely consider single events, but also take into account risk scenarios and the interaction of multiple risks.

Mark Layton, global leader of Enterprise Risk Services at Deloitte & Touche LLP, stated, "Getting risk management right has never been more important. Executives and boards need to realize that organizations that effectively manage risks -- both to existing assets and to future growth -- will, in the long run, outperform those that don't."

Silos must be bridged and specialized approaches must be broadened, said Layton, and risk-taking for reward should get as much attention as defensive risk management. "Simply put," he said, "companies make money by intelligently taking risk and lose money by poorly managing it. Of course, at stake is not only earnings and market cap, but also opportunities for growth, gains in market share, and the ability to become viewed as an industry leader."

Deloitte & Touche LLP's innovative Risk Intelligence approach is already receiving accolades. For example, the respected independent research firm, Forrester Research, in a recent report on the enterprise risk management consulting marketplace, gave Deloitte Touche Tohmatsu (DTT) member firms the highest overall service offering score. The report, entitled "The Forrester Wave: Enterprise Risk Management Consulting Q4 2005," evaluated the relative capabilities of the leading global providers of ERM consulting services across a total of 37 criteria grouped into three high-level areas.

The Deloitte & Touche LLP whitepaper, "The Risk Intelligent Enterprise: ERM Done Right," is available at no charge from Deloitte & Touche LLP. Electronic and print copies of the whitepaper may be ordered at www.deloitte.com/RIpov.