Risk Management Isn’t Just for the Finance Staff

Operational leaders have an opportunity to align resources against their greatest vulnerabilities.

Federal law enforcement and other operational mission leaders are hearing about new requirements for enterprise risk management, an organizationwide approach to managing risks that has been in practice in the commercial sector for some time.  

As they begin to understand ERM, many agency leaders are asking: What is the quickest way to check this box and get back to serving the mission? The concern is valid, and compliance requirements and other guidance from the Office of Management and Budget may sound like a task best delegated far down in the organization. But if operational and mission leaders take a closer look, they will see that ERM represents an opportunity for them—it’s not just a task for the finance and accounting people.  

Let’s start with some definitions. OMB recently published Management’s Responsibilities for Enterprise Risk Management and Internal Control. As such, agencies must create an integrated risk governance structure to “improve mission delivery, reduce costs, and focus corrective actions towards key risks.” The process should include “leadership from the agency Chief Operating Officer and Performance Improvement Officer, and close collaboration across all agency mission and mission-support functions.” It lays out requirements for managing risk across the agency, including risks associated with the mission. The requirements include risk identification, evaluation, response, and monitoring, among other things. Agencies were to conduct an initial risk identification, due in June, and prepare an evaluation of risk mitigation by September. Annual updates are required thereafter.

By engaging with agencywide ERM initiatives, mission leaders can align their resource needs to the risks they face. Clear articulation of risks is the first step to getting adequate funding at a time when “doing more with less” has become the new normal.  

There are three other primary benefits that ERM brings to the mission:

First, mission leaders manage known risks every day. They manage those risks in real-time, making trade-offs in resources to optimize operations and drive desired outcomes. These decisions impact choices in operational security, technology acquisition and development, personnel management and security, to name a few. Every day mission leaders choose to accept risk in some areas and mitigate risk in others. There is no way to have it all; adding the lens of operational risk to resource assessments helps inform priorities and decision-making.  

Second, some agencies have over-corrected for risks identified in the past. For instance, concern over the accuracy and completeness of information used in decision-making may lead to extensive, time-consuming review processes. But this can have a negative impact on operations, particularly in law enforcement, homeland security, and defense missions. The failure to act quickly and on the basis of timely, complete information may endanger people and increase costs, and it expends precious time and attention on non-value add activity. Employing ERM to understand the potential impacts through risk evaluation, mitigation, and monitoring provides valuable insight to managers so they may adjust processes and controls appropriately.

Third, mission risks emerge from changes in the environment. ERM should create a conversation among leaders about how changes in the operating environment (technology, threats, resources, etc.) impact an agency. For example, consider the impact smartphone technology and the rise of social media is having on law enforcement and security organizations. People increasingly record and publicize interactions with officials, shaping public perceptions and in some cases providing bad actors with a wealth of information. Information sharing relationships that have persisted for decades are shifting, and encryption is shielding communications from lawful intercept and collection. ERM can help agencies identify, evaluate, and accept or mitigate risks as they evolve.  

An Opportunity

Mission leaders should embrace ERM. When the chief risk officer comes looking for support, they should take the opportunity to identify and communicate risks.

How? For known risks, ask managers for the lists of issues they have long told themselves will never be addressed due to a lack of resources. For over-corrected risks, mine existing planning documents and ask stakeholders for input to identify areas where over-correction is increasing costs and slowing response times. Do the same to identify how changes in the mission environment are affecting risk. Communicate these issues to agency leaders through the ERM process.

In short, ERM creates an opportunity to mitigate known risks, revisit over-corrected risks, and identify emerging risks.

John O'Connor advises federal agency leaders on strategy, operations, and change management for PwC's Homeland Security and Law Enforcement practice.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.