Ask a room full of private company executives about the risks that keep them up at night and you’ll hear a familiar list: ransomware, data breaches, supply chain attacks. But treating cyber risk as an IT challenge misses the bigger picture. These threats are enterprise risks—and they require an enterprise response.
Deloitte’s five-part enterprise risk management (ERM) series can help your organization detect and protect against potential threats. It explains what ERM is, how it works in a private company or family enterprise, and how to plan implementation. Each installment includes actionable insights and practical guidance across cyber security, internal controls, and operations. Here’s a breakdown of the focus areas we cover:
Part 1: Adopting a strategic approach
In our experience, many private companies and family enterprises manage risk using a subjective, bottom-up approach. This tactic works well for spotting and putting out fires, but it may keep organizations in reactive mode.
Part one of our series outlines some practical steps toward implementing a more strategic and proactive ERM program. It introduces an ERM maturity model to help you gauge the current state of your efforts, and what it could take to reach the next level. It also outlines four basic moves you can make to become more risk intelligent ASAP—and continue to stay that way as internal and external conditions evolve.
Part 2: Enhancing internal controls
A common misconception is that internal controls compromise agility. But, in many cases, the opposite is true. Internal control systems help ensure that information is sound, empowering private business leaders to make decisions with speed and confidence.
In part two of our series, we dive into how to execute a risk assessment for your internal controls. (Spoiler alert: Processes and policies are not controls.) We also discuss how to distinguish between preventive and detective controls and why balancing the two matters. If this all sounds daunting with limited time and resources, we close this installment with a real-world approach to controls based on incremental improvements.
Part 3: Mitigating cybersecurity threats
Cybercrime costs are increasing, underscoring the need for more robust security measures. A strong detect-and-respond capability within an ERM program can enable your teams to surveil and address cyberthreats as they arise.
Part three of our series dives into how to do just that. We start with an overview of common attacks targeting private companies, including ransomware. Then, we discuss some fundamental identity and access management practices that can help avert a potential data security breach or loss. We close with a set of questions your team can answer to craft an incident response strategy, regardless of where you are on the preparedness spectrum.
Part 4: Monitoring for operational risks
Within enterprise risk management frameworks, risks that begin as missteps can snowball into system-wide failures. A prime example? Operational risks such as employee misconduct, data mishandling, or lapses in internal controls.
In part four of our series, we help private company leaders recognize what operational risks look like and how to manage them. We start with a hot topic: How to boost your security posture to confront AI-driven risks. We also detail the need to infuse new types of expertise within the C-suite, such as the potential addition of a Chief Trust Officer. And we share practical ways to create a culture of readiness—including crafting a user experience that makes ERM strategies stick.
Part 5: Building your risk resilience
For private companies, resilience builds confidence in handling the next evolution of risks, no matter what they may be. In our last installment, we outline four resilience postures private companies can assume, depending on the nature of the threat or opportunity and whether it calls for leaders to play offense or defense. We close the series by examining two critical questions that can spur your ERM plan forward: What are the severe but plausible risks or disruptions that could affect us? And what is our ability to respond and adapt to those situations?
Becoming more risk intelligent, and staying resilient as threats evolve, doesn’t happen by accident. It’ll hinge on critical skills and capabilities you may want to build for tomorrow. The private companies that get this right tend to make smart, steady investments in talent, technology, and the resources that keep ERM moving. That’s what transforms ERM from a once-a-year exercise into a working muscle you can rely on.
Read Detect and protect:Enterprise risk management strategies for your private company
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FROM OUR SPONSOR DELOITTE PRIVATE
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