Sumner Blount and CA have coined the term Risk IQ to address a company’s risk management environment: Risk IQ – The Key to Effective Risk Management. The idea is deliver comprehensive, timely and accurate information to the decision makers to improve the decision-making process.
They break the Risk IQ into two parts: visibility and insight.
You need visibility into the right information at points in the business process to identify risks across the enterprise. You need easy access to it. You are all too likely to ignore or not ask for a report that is difficult to create.
You need insight into the information so it needs to be structured and presented in a way that allows the decision-maker to properly assess, quantify and manage the associated risks.
Improving your organization’s Risk IQ by establishing a common risk management framework can have significant financial benefits, in addition to controlling enterprise risks more effectively. Standard & Poor’s, for example, uses the level of risk management maturity as part of its overall corporate evaluation. So, poor risk management leads to a lower rating, which can increase the cost of borrowing, among other consequences.