ERM: embracing a total risk model; Enterprise risk management (ERM) is fast joining the business lexicon for more and more companies as increasing regulatory, legislative or stock exchange rules demand that senior executives and corporate boards certify their knowledge of current and future risks and the programs in place for managing those risks.

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Enterprise risk management - Cover Story

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ERM: embracing a total risk model; Enterprise risk management (ERM) is fast joining the business lexicon for more and more companies as increasing regulatory, legislative or stock exchange rules demand that senior executives and corporate boards certify their knowledge of current and future risks and the programs in place for managing those risks.

Don't tell Mike Gardner that enterprise risk management (ERM) shouldn't be a major "do-or-die," board-sanctioned effort at corporations worldwide. Vice president of Audit Services at Providence, R.I.-based Textron Corp., Gardner had already structured a major ERM effort at his former employer, Hillebrand Industries Inc. in Indiana. When he subsequently was hired by Textron as Vice President of Internal Audit and it became more interested in ERM, he was asked to evaluate the applicability of ERM for Textron as well. He advises other companies to follow suit--as quickly as possible.

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Never mind that the evolution of ERM, in both theory and practice, is in its infancy--with nay-sayers who believe there's no need for it, and many senior executives and board members who still believe effective risk management need be nothing more than what it has been traditionally: keeping hazard and financial risks under control.

Never mind, too, that there are plenty of executives who would simply think no more about risk management under any name or title--now that they've...

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