You can’t have a successful enterprise risk management (ERM) programme without the commitment and support of executive sponsors. An executive sponsor is a senior leader within an organization who provides guidance, champions initiatives, and creates an environment that is conducive to success. But how do you identify the right executive sponsor for your ERM program? Look for someone who meets the following criteria:
The ideal executive sponsor is influential within the organization. They have the ability to garner support from other senior leaders and get things done. When executives are on board with your ERM program, it cascades down throughout the organization and increases buy-in at all levels.
Your executive sponsor should be available when you need them. They should be responsive to your requests and make themselves accessible when needed. The last thing you want is an executive sponsor who is MIA when you need their help the most.
Your executive sponsor doesn’t need to be an expert in ERM, but they should have a general understanding of the concept and its objectives. They should be able to provide insights and ask probing questions that will help move the ERM program forward. If your executive sponsor is not knowledgeable about ERM, they will not be able to provide the level of support you need to be successful.
Ideally, your executive sponsor will have a personal interest in risk management. However, at a minimum, they should be committed to supporting your ERM program. This means they are available when needed and willing to provide resources and guidance when requested. Without commitment from your executive sponsor, your ERM program will likely stall or fail altogether.
An effective executive sponsor has energy—they are passionate about their work and invested in the success of the organization. This energy is infectious and Motivates others to do their best work. A lack of energy can quickly kill momentum so it’s important to find an executive sponsor who can bring some excitement to the role.
The ideal executive sponsor is proactive—they take initiative and are always looking for ways to improve. They see risk management as an opportunity to make positive changes rather than a necessary evil. A proactive approach ensures that your ERM program stays relevant and responsive to changes in the marketplace.
A visionary executive sponsor has a long-term view of risk management. They understand that risks change over time and that management strategies must adapt accordingly. A visionary also understands that risk management is an ongoing process, not a one-time event.
Your executive sponsor should be accountable for their decisions and actions. This means they take responsibility for their own performance as well as the performance of their team members.
Your executive sponsor should create an environment that supports risk-taking while also promoting a culture of accountability.
When faced with difficult decisions, your executive sponsor should be able to make tough calls quickly.
An effective enterprise risk management (ERM) program requires the commitment and support of an executive sponsor. Look for someone who is influential, available, knowledgeable, committed, energetic, proactive, visionary, accountable, supportive, and decisive.