Challenge
As the organisation’s risk team was quite new, they learned risk management hands-on. That’s why they asked for our help, drawing on our experience with similar public organisations. We had to implement a quick, practical approach that aligned with their unique culture. This framework also needed to demonstrate early results to senior leadership and the board of directors, as not everyone was convinced by the benefits of enterprise risk management.
BDO’s Tailored Approach & Solutions
In an organisation of this size and type, acceptance is key to a successful implementation. We therefore spent some time with the risk team to analyse the roll out of their risk appetite and the early attempts to develop key risk indicators dashboards. Our focus centred on understanding their specific challenges, needs, areas of resistance, and identifying potential allies throughout these critical projects.
After meeting a series of supporting departments - including finance, infrastructure, IT and HR - we discovered two teams particularly eager to enhance their daily operations with leading risk indicators. These departments recognised the value of a well-designed dashboard and enthusiastically agreed to participate in the pilot project.
As natural partners of operational risk management, we collaborated with the HR and IT department first. Working closely together with risk officers and decision-makers from these departments, we proposed a comprehensive list of potential key risk indicators. From this selection, they identified metrics that either already existed within their systems, could be easily collected, or offered meaningful insights to help them grasp their key risks and effectively monitor core activities.
We defined thresholds in line with the risk appetite levels of the institution for the related risks and tested the selected metrics over three to six months. Following this successful trial period of dashboard implementation, the key risk indicators were formally adopted throughout the departments.
Impact & Result
This project effectively translated the team’s existing risk appetite framework into concrete, measurable key risk indicators. It transformed abstract risk limits into practical metrics that departments could implement and monitor.
The pilot initiative with HR and IT proved remarkably successful. Our collaborative approach demonstrated significant value: working directly with departments, jointly selecting metrics tailored to their specific needs, and thoroughly testing thresholds and governance structures before full implementation.
This methodology has since been replicated across several other departments within this international institution, consistently delivering successful outcomes.
