Enterprise Risk Management:

Its 5 Biggest Weaknesses

An Interview with Dr. Vernon L. Grose

 An interview with
Dr. Vernon L. Grose.
Chairman,
Omega Systems Group Incorporated

• Author of MANAGING RISK: Systematic

Loss Prevention for Executives
• President Reagan Appointee to NTSB
• Advisor to Pentagon and NASA on R/M
• Provided R/M for the Olympic Games
• Hundreds of TV interviews on CNN, FOX, CBS,
NBC, ABC, MSNBC and Canadian TV
 Five Biggest
Weaknesses of
ERM

1. Non-SYSTEMATIC, disjointed,
producing internal conflict, and
unable to address full range of
risks.
 Five Biggest
Weaknesses of
ERM

2. REACTIONARY, not Proactive.

Waiting for the next big hit –
even then often producing
costly over-reaction.
 Five Biggest
Weaknesses of
ERM

3. Based on OUTSIDE EXPERTISE -

often of debatable value and
focused only on “Hot Spots”.
Ignores internal (free!) expertise
about risk.
 Five Biggest
Weaknesses of
ERM

4. No COUNTERMEASURE COST
– the “missing link” for top
executives. Most R/M limited
to ONLY probability and
severity of loss.
 Five Biggest
Weaknesses of
ERM

5. Forces random use of very

limited resources – because
risks cannot be RANKED for
significance.
 Five Biggest
Weaknesses of
ERM

1. Not systematic, creates competition

2. Reactive rather than proactive
3. Trusting outsiders, not inside expertise
4. Only two-dimensional, instead of three
5. No ranking of risk for significance
 For more
information

• Speak to an OSGI expert

• Order book, MANAGING RISK
• Check out www.omegainc.com