IRM M1 U1.2 Evolution of ERM Flashcards
Historically, risk management has focused on …
focused on the mathematics of hazard based or financial risks. It tended to focus on specific risks and neglected an enterprise-wide approach.
A historical timeline in risk management history
1900 – 1970: Development of specialist risk professions H&S, BCP, Emergency Recovery, Quality (ISO 9000). IT, Project
1970-1995: Risk mgt specialism moves to generalist risk management
1995 – date: The maturing risk profession.
1995 – 2004: The introduction of risk management standards.
2004 – 2018: International frameworks and standards developed and updated, such as COSO ERM Frameworks and ISO 31000.
2010 - date: Prominence of climate change and ESG rises – CSR, sustainability and resilience become core risk management conversations.
Which sector had CRO first developed?
Finance
Origins of RM - Compliance
In respect of compliance, UK governments have regulated working conditions since the earliest Factory Acts in the 19th century, but the introduction of the Health and Safety at Work Act in 1974 gave regulators more authority to apply the principles of a risk-based approach in relation to these risks.
Origins of RM - Hazards
insurance firms increasingly imposed risk mitigation and control standards from the early 19th century if they were required to underwrite the risk.
For example, insurers provided their own fire brigades and provided their clients with marks to identify which houses should be saved in the event of a fire.
Similarly, marine insurers championed the use of the ‘Plimsoll line’ to indicate the level of cargo that a ship could safely transport without being dangerously overloaded.
Levels of RM Sophistication
inform: unaware of obligations; reform: awareness of non-compliance;
conform: actions to ensure compliance;
perform: achieve business opportunities;
deform: inactivity caused by obsessio
