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Smart monitoring for operational risks
Detect and protect: Operational risk awareness and management strategies
Part 4 of 5
Within enterprise risk management (ERM) frameworks, some risks are ever-present. They begin as incremental missteps, and can eventually snowball into system-wide failures. A prime example? Operational risks.
These risks may include employee misconduct, data mishandling, or lapses in internal controls. They can even stem from beyond company walls. Evolving threats like these require “always-on” monitoring. This type of monitoring can be compared to autonomous cars manufactured with radar sensors that provide protection from nearby objects, help keep the vehicle in its lane, and perform emergency stops when needed. These individual system components require continuous monitoring to help the driver avoid catastrophic risk. Similarly, if individual dangers aren’t monitored and addressed in business operations, they can sometimes lead to larger problems.
For private company leaders, tackling various types of operational risks begins with awareness and ends with management. In Part 4 of this 5-part ERM series, we not only explore what operational risks can look like, but helpful steps towards managing them. Learn how to do both by downloading the full report.
Key takeaways
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Keep pace and maintain control
This is particularly true for issues related to intellectual property (IP). The recent increase in the adoption of emerging technologies (e.g. GenAI) comes with new risks to manage, such as protecting proprietary data and using copyrighted material without permission. Companies have to be able to distinguish whether knowledge has originated from the company itself or AI.
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Tap into leaders and partners
While risk-monitoring capabilities have evolved quite a bit, they shouldn’t be left to navigate on autopilot. Business leaders can get more involved, and that may mean the emergence of new positions, like a Chief Trust Officer. The board shouldn’t be left with the sole weight of risk responsibilities. Instead, the company as a whole can begin shaping and managing its risk tolerance and approach.
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Create a culture of readiness
Being ready to handle risk starts with a culture that understands risk. Then, it’s taken a step further by having safeguards in place and knowing how to apply them. Leaders should set the tone from the top—making sure operational risks don’t slip through the cracks by deciding on a risk posture, paying attention to what employees are saying, and never forgetting the details.
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Next up in the series
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A modern approach to managing risks
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Enhancing internal controls to improve risk management
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ERM and the fight to contain cybersecurity threats
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Strengthening private company risk resilience
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Detect and protect: 5-part series on enterprise risk management | Deloitte US
Enterprise risk management (ERM) requires a company-wide mindset. What does that look like? Follow along in this 5-part series.
