With all the recent catastrophes from Greece to Lehman Brothers to salmonella to BP, you would think everyone would see the value of effective enterprise risk management programs to pass the fiscal quiz for their life and business. Yet many companies have no intention of adopting enterprise risk management, a survey finds, while many others have less than robust ERM processes.  If you are starting to get concerned, Google the article by CFO Magazine titled They'll Take Their Chances. You will find the survey very interesting and possibly very scary.

For those of you whose reputation, job, even staying out of jail if Sarbanes Oxley is involved, did you approve or even know about that decision?

·         “Enterprise risk management may be popular in concept, but it is still struggling to gain traction in the real world, especially among smaller companies. According to a recent survey by the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA), 45% of U.S. respondents — many of whom were CFOs — reported having no ERM framework in place and no plans to implement one.”

·         “What's more, of companies with ERM systems in place, only 1.5% characterized their companies' risk oversight processes as "very mature" or "robust." The bulk, 84%, rated their companies' risk oversight process as ranging from "very immature" to "moderately mature."

·         “The state of ERM isn't much better in Europe, according to the survey. Nearly 40% of European companies reported they are not using and do not plan to use ERM, while only 8.2% of the ones that do consider their processes robust.”

If any of you are concerned about being one of the leaders in those 84% of underachievers and proclaimed risk takers, how do you find a reasonably priced option which does not leave you in the possible future situation of looking for mercy from a fair, unbiased plaintiff’s attorney second guessing some decision, you may not even have been part of?

Some of my best clients have considered another option. You can get an external independent fiscal checkup or company health review.

Since the CPA firms have become so Sarbanes and rule oriented, business has lost the valuable old fashioned management letter which used to tell you how to increase the likelihood of actually achieving new products, increasing markets etc and what looming risks to avoid. People tell me that beneficial insight went away with recent regulatory changes and forced CYA behavior by your external accountant and other key advisors.

For those newer leaders who might have mainly seen the Sarbanes check the every box in the world approach, this might be a back to the basics tool you would benefit from.

Since 84% of the survey seems exposed on catastrophic risk, those of you in the 84% might look into a review to reduce the likelihood of such a life or death issue.

The 16% doing well might look at this as a tool to widen the lead over your competitors, who are already struggling to catch up with you.

Whichever group you are in, the business and job you lose might be your own.