Imbedded within any enterprise risk management (ERM) program is the ability to communicate effectively throughout all the processes to the decision-makers and implementers. Finance professionals at all levels within an organisation have used a heat map during the identification, assessment, and monitoring phases of the ERM process. As strategies and responses are challenged, changed, and developed, communication is a key element.
Through the example of quantifying potential risk occurrences and their impact, a deeper understanding is presented of the heat map, which is intended to facilitate explanations and understanding to all stakeholders. This tool is geared towards the novice as well as the experienced professional. Included is a diagram explaining the complete ERM process, further explanation of impacts and occurrences and a deep dive into a quantitative example directing the user towards defining metrics, and the use of additional resources to be used in communicating risk.
The “Communicating Risk Using a Heat Map” resource is a companion tool to the previously updated Risk Heat Map, and is intended to be used alongside one another. The full Risk Management Tool can be found at on cgma.org. Please make sure to check there for new information.