Tradeshow Floor: ERM - Show Me the Money

As the tradeshow floor of the Risk and Insurance Management Society Inc. was humming to the sounds of drills, hammers and forklift hydraulics setting up the booths in the cavernous halls of the San Diego Convention Center, Bob Morrell, CEO of vendor Riskonnect, was quietly contemplating the next few days.

From a rented condo on K Street, across from the convention center, Morrell decided this year's meeting of risk and insurance managers was going to be a bellwether for just how serious the risk management community is going to be about enterprise risk management and the purchase of software tools to communicate this concept.

"We're going to make an investment decision after this meeting at RIMS, and it's about making a strategic choice," he said.

Why do Morrell's decisions matter? Because Morrell's been in the enterprise risk management and risk management technology space for more than a decade. And where he decides to commit capital or the future efforts of his new company says something about how he's assessing the marketplace.

There's a lot of buzz around the term enterprise risk management. RIMS leadership has pushed hard for companies to adopt the strategy as a way to approach risk. Standard & Poor's has formally declared that its analysts are looking to evaluate a corporate enterprise risk management program when assessing how to rate a corporation's bonds.

But for all the discussions Morrell's had with risk managers - and they are numerous; remember that Morrell's wife, Elizabeth, is a risk manager at the Southern Co. - and despite all the meetings he's had with board members among the nation's Fortune 500, Morrell says that the risk management community still has trouble communicating the importance of enterprise risk management to their own boards.

Many risk managers, he said, are communicating risk management with the help of Excel spreadsheets and Powerpoint presentation, instead of with enterprise risk management presentation software - which is what Riskonnect is all about.

"RIMS talks about ERM all the time, but the reality is how many people here (in San Diego) are responsible for reporting on high-level risk to the board or to the CEO?" said Morrell. "And do they have the tools to do that?" Excel and Powerpoint, Morrell said, are not adequate to give the board a clear picture of the risks facing their companies.

Certainly, the communications gap between people who practice enterprise risk management and their ability to sell the importance of an enterprisewide approach to risk to their board can't be blamed on RIMS leadership.

Over the past several years, RIMS has insisted on a full-court press about educating its members about the importance of enterprise risk management, and enterprise risk management sessions are routinely well attended. This year once again, RIMS is expecting the enterprise risk management sessions to be packed with attendees.

But do risk managers gathered at RIMS provide a receptive audience for enterprise risk management tools? Or has Morrell got it all wrong and is the audience for his product not at this meeting? Perhaps a little of both.

"We’re at a very important turning point for enterprise risk management," he said. "It’s going to happen because Standard & Poor's is demanding it. It’s a question of who’s going to have a venue for it. RIMS will have a piece of the pie. The question is how much?"

Morrell, certainly, will have his answer by Thursday, and perhaps the rest of the industry too.