The Lumos Partnership

Enterprise-wide Risk Analysis

Different organisations have different risks, different management cultures and different regulatory requirements.  There is no one-size-fits-all solution. 

The identification and quantification of EWRA helps confirm the financial impact and its significance to an organisation. The process helps identify root causes, potential correlations with other significant risks and their aggregate impact, so a company’s operational and strategic risks may be appropriately and consistently managed alongside your financial risks.

We help review and ratify risk registers and risk maps.  Through workshop analysis we construct and populate risk scenarios and build models for key risks. These then guide the construction of an appropriate risk framework including:

  • Information gathering to  monitor risk drivers and indicators
  • Risk reporting and escalation protocols
  • Potential risk management solutions
  • Risk ownership and control.

Regulatory compliance (COSO, SOX, Basel I & II and Solvency II) has led many organisations to invest substantially in EWRA, resulting in numerous detailed financial risk models and risk reporting frameworks.

Increasingly, EWRA is becoming a more substantial regulatory cost and less an integrated tool to enhance business performance and shareholder value. We review and ratify risk models and frameworks to ensure that both are fit for purpose.

Our line of questioning typically asks the following:

  • What were the objectives in implementing EWRA? The current EWRA structure meeting these objectives – e.g. aligning strategy with risk appetite?
  • Are the non-financial (operational) risks quantified in a consistent manner to the financial risks? Is risk prioritisation consistent and appropriate?
  • Is the reporting framework appropriate to the risks identified? Do the models appropriately describe the nature of the risks - drivers and consequences?
  • Is the EWRA structure being used by the business to manage risk – retention, mitigation and transfer? Is it being used to identify the value for money of risk management solutions, and hence identify the optimum solutions to the organisation’s risk?

We ensure EWRA structures add maximum value to an organisation and provide a solid platform for corporate decision-making while generating financial benefits.