ERM Strategy for Credit Unions
By: William Hord, Vice President of Enterprise Risk Management Services for Quantivate.
When tackling an ERM strategy, your board and management must discuss and articulate your credit union’s risk management attitude and risk appetite. Both need to fully agree on the level of risk that the credit union is willing and able to take in the pursuit of their ERM strategic objectives. In the absence of this understanding, it is difficult for management to achieve the desired results and for the board to effectively fulfill its risk oversight responsibilities.
When your credit union's management develops a formalized risk management processes, it is possible to successfully act upon risks at an enterprise level- in relationship to the strategic objectives you are seeking to achieve.
When these enterprise level risks are uncovered and openly discussed, management and the board can efficiently determine whether they are in line with their risk appetite.
Since risks for the credit union are always evolving, having an understanding of the most significant risks and their related responses will provide timely and quality risk information across the credit union. In turn, the addition of key risk indicators will help to identify emerging risks that may ultimately impact the achievement of strategic objectives.
When property executed, enterprise risk management will assist executives and boards in strengthening risk management in their credit union. Ultimately, this enhances the board’s risk oversight capabilities and provides a more robust credit union for the membership.
For a deeper dive into questions that credit unions need to know in order to implement an ERM structure strategically and successfully, listen to ERM Strategy for Credit Unions, the last installment of the podcast series, “A 360 View of ERM.”
You can catch up on the previous sessions by listening to them here: Part 1 – Getting Down to the ERM Basics or Part 2 – How to Create a Successful ERM Program.
Quantivate is the NAFCU Services Preferred Partner for Vendor and Contract Management Software. More educational resources are available atwww.nafcu.org/quantivate.