Welcome to RIMScast. Your host is Justin Smulison, Business Content Manager at RIMS, the Risk and Insurance Management Society.

In this episode, Justin interviews Carrie Frandsen, the ERM Director of the University of California and a RIMS-CRMP Commissioner. Justin and Carrie discuss all things ERM. In particular, Carrie explains the purposes of ERM, what constitutes success in an ERM Program, and how to start an effective ERM Program in your organization.

Listen for ideas on fitting ERM into your organization’s daily processes and decision-making, with resources to set you on the path to ERM success.

Key Takeaways:

[:01] About RIMS.

[:14] Public registration for RISKWORLD 2025 is now open! RIMS wants you to engage today and embrace tomorrow in Chicago from May 4th through May 7th! Register at RIMS.org/RISKWORLD and the link in this episode’s notes.

[:30] About this episode, coming to you from RIMS headquarters in New York. We will be joined by Carrie Frandsen, for some ERM motivation. She is the system-wide ERM Director for the University of California and a RIMS CRMP Commissioner.

[:58] The next RIMS-CRMP Exam Prep Virtual Workshop will be held on December 17th and 18th.

[1:09] On February 19th and 20th, there is a two-day virtual workshop for the RIMS-CRMP led by former RIMS President Chris Mandel and presented by the RIMS Greater Bluegrass Chapter, the 2024 RIMS Chapter of the Year.

[1:27] The next RIMS-CRMP-FED Exam Course will be held from February 4th through the 6th, 2025. Links to these courses can be found on the Certification page of RIMS.org and through this episode’s show notes.

[1:42] RIMS Virtual Workshops! Gail Kiyomura of The ART of Risk Consulting will host the “Fundamentals of Insurance” virtual workshop on February 19th and 20th, 2025.

[1:57] We’ve got ERM on our minds. On February 26th and 27th, Elise Farnham of Illumine Consulting will lead “Applying and Integrating ERM”. “Managing Data for ERM” will be hosted by Pat Saporito, starting on March 12th, 2025.

[2:18] A link to the full schedule of virtual workshops can be found through the RIMS.org/education/online-learning pages. A link is also in this episode’s show notes.

[2:29] Interview! Our guest today is one of the most enthusiastic people I know on the topic of ERM! She is Carrie Frandsen, the system-wide ERM Director of the University of California. She’s also a RIMS CRMP Commissioner.

[2:48] Carrie is here to talk about all things ERM. Whether you want to build a program from the start or you want to enhance an existing program, this is the mind that you want to tap into! We are thrilled that she’s here. Let’s get to it!

[3:03] Carrie Frandsen, Welcome to RIMScast!

[3:13] Carrie says she is a true ERM geek! With enterprise risk management you need the ability to think organization-wide.

[3:25] Not just to think organization-wide but you need to be able to think about the world and how things that are changing in the world, like politics, economics, and sociological changes, impact your organization. Then you have to get other people excited about that.

[3:42] You need to be able to partner with people inside your organization, like internal audit, compliance, and health and safety, all the different groups that are second-line, and help them get excited about building an enterprise-wide view of risks across the organization.

[4:03] Once you’ve got your second line of defense, you can build that risk committee to democratize risks across the organization. Everybody can see the risks in their silo and how things impact each other across different units.

[4:36] Carrie says the primary goal of enterprise risk management is to enhance an organization’s ability to anticipate and mitigate risks effectively while maximizing those opportunities for value creation.

[4:49] ERM helps organizations make more risk-informed decisions. It helps improve resilience and removes obstacles to achieving strategic objectives.

[5:06] ERM is part of the governance and management of an organization. Know what could impact you from outside the organization as well as things that are changing in your policies, procedures, and processes. Make sure those are effective to continue achieving your objectives.

[5:37] ERM can provide an early warning on risks and the effectiveness of controls. When you’re using ERM in decision-making, it can help you to challenge assumptions before decisions are made. It can help you to set the frame for the decision and help you consider the alternatives.

[6:02] ERM can help you ensure that appropriate actions are taken to reduce your risks. It helps the organization to learn and adapt.

[6:14] Healthcare organizations do root cause analysis, a good risk assessment technique to figure out how to make negative outcomes not happen again. There are a lot of risk assessment techniques that can help you, depending on the situation your organization is working on.

[6:42] Culture is how things are done. A risk-aware culture is essential for a successful ERM implementation. It fosters an environment where risk is openly discussed and employees feel comfortable in identifying and reporting potential risks without fear of repercussions.

[7:08] This allows organizations to address issues proactively before they escalate. If you have a risk-aware culture, risks and risk assessments are integrated into decision-making and risk is considered at all levels of decision-making from strategic planning to operational activities.

[7:29] This helps to ensure that risk is a key factor in every management decision. Employees can take ownership of risk management.

[7:38] The University of California has a motto: “ERM means Everyone’s a Risk Manager.” Individuals doing their day-to-day work in their area of expertise are the ones who know best what their risks are and how to manage their risks.

[7:58] Our role as risk managers is to support these employees by giving them training in ERM, and risk assessment tools, and letting them talk to other people about risks that may impact them that aren’t in their area. That distributed approach enhances the effectiveness of ERM.

[8:18] A risk-aware culture promotes continuous learning where lessons from past incidents are shared and used to improve future risk management practices.

[8:36] At the top level of ERM are the board and leadership. They set the tone for the organization’s risk culture. They need to understand the dynamic risk environment in which the organization operates. They need to know of rising risks so they can make good decisions.

[9:06] At the day-to-day level, where the work happens, is the risk owner. That’s the person with the accountability and authority to manage that risk.

[9:18] The business unit level is where risk management and control processes take place. An organization’s risk is inseparably connected to its objectives. The responsibility for managing risk can’t lie with anyone other than the person who’s responsible for achieving those objectives.

[9:36] Good risk management is everybody’s responsibility. What does the Risk Manager do? The risk leader provides the infrastructure, tools, coaching, leadership, and resources.

[10:08] Resources can be anything from software to workshops to all sorts of things to help people identify, manage, monitor, and report on the risks.

[10:20] Risk managers can champion a risk-intelligent culture across the organization. Risk-intelligent culture is a term coined by Deloitte in a white paper.

[10:46] Risk managers are the ones who champion the integration of ERM into existing policies, structures, and processes. They get the risk committees going, they make sure that the issues get escalated to leadership, and that policies, procedures, and controls are improved.

[11:07] Risk Managers facilitate proactive risk thinking. They conduct risk sensing and report on emerging risks. An ERM person is a generalist. They don’t manage a particular area but check in with everybody about rising risks and report that information. They have people tracking risks.

[11:55] We have a new political landscape and changes in society. There are always new health issues arising. As long as there’s somebody in an organization paying attention to conditions, the ERM person’s role is to make sure those things get considered at the leadership level.

[12:19] A Risk Manager can provide a structured discipline for the consideration of risk in decision-making. They can lead risk workshops. They can make sure a risk-assessment process is built into regular management meetings. They can support risk-mitigation activities.

[12:46] Risk Managers can support mechanisms to provide timely risk information to decision-makers.

[12:54] Plug Time! RIMS Webinars! Hub Internationa...

ERMotivation with Carrie Frandsen, RIMS-CRMP