RIMS gives “thumbs up” to COSO draft ERM guidelines

The Risk and Insurance Management Society (RIMS) is praising a new draft document on enterprise risk management (ERM). The draft, created by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), its project advisory council and Pricewaterhouse Coopers LLP, is “comprehensive and thorough”, says RIMS.
RIMS says it will now look at working together with COSO on advancing the use of ERM by corporations. “For the past three years, RIMS and COSO have been involved in parallel processes to reinforce the value of ERM. While COSO was creating the draft document, RIMS was offering ERM workshops as part of the RIMS Fellow designation,” notes RIMS president Lance Ewing. “Perhaps it is time to join forces.”
RIMS is also encouraging its members to read and respond to the draft by the October 14 deadline for commentary.
COSO began working on the draft in January 2001, and has laid out eight principles of risk management aimed at organizations of any size. These include viewing insurance and risk financing as just two processes in the risk management process.
RIMS is also stressing the need for cooperative effort to achieve ERM within an organization. “RIMS believes that its primary deputy members, the risk managers of business, government and non-profit organizations, have the understanding, knowledge and practical experience to assume a leadership position as organizations follow the COSO guidelines,” says Chris Mandel, RIMS chief risk officer and AVP of ERM for USAA. “Accordingly, cross functional partnerships with auditors, accountants, lawyers and other key leaders, will be critical to successful implementation of ERM at any firm.” COSO is comprised of member associations representing accounting and auditing professions.