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Government Enterprise Risk Management (ERM) Maturity Continues to Grow

A recent report published by Guidehouse and the Association for Federal Enterprise Risk Management (AFERM) reveals continually maturing performance levels in Enterprise Risk Management (ERM) among government entities. This advances the critical nature of ERM capabilities in navigating the complexities of modern governance.

According to the findings from the 2024 Government Enterprise Risk Management Survey, 80% of federal professionals recognized technology as a significant emerging risk that could affect their organizations within the next three years. The report emphasizes the need to incorporate these views into the organizations' overall risk profiles.

Historically, the maturation of ERM within government agencies has been coupled with a variety of factors, while the most recent survey reiterated the persistence of themes from previous years. Top concerns continue to include human capital—focused on employee morale and retention—and technology, primarily regarding cybersecurity vulnerabilities. In this environment marked by uncertainty, the ability to adapt and evolve ERM strategies could significantly empower organizations in addressing unforeseen challenges.

Kate Sylvis, Director and ERM Leader at Guidehouse, stated, "ERM in federal agencies continues to evolve. The ERM capabilities currently in place allow organizations to identify risks related to changing strategies and operational goals." Sylvis' insights underline the importance of a robust ERM framework that enables agencies to strengthen their approach to risk management effectively.

Survey Highlights:

• - For the second consecutive year, human capital and technology topped the list of risks needing to be integrated into risk management strategies.
• - 47% of respondents noted their organizations defined risk appetite statements, a crucial part of effective risk management frameworks. Furthermore, 83% updated these statements within the last three years.
• - It is noteworthy that the organizations that integrate ERM into the performance plans for all employees often report success in risk management objectives.
• - Direct reporting structures, where the lead of the ERM program reports straight to the agency head or deputy, have yielded positive responses as well.

The report also seeks to equip government leaders with essential insights into the current state of ERM across federal, state, and local governments in the U.S. Conducted annually for the last decade, this survey allows leaders to benchmark their progress compared to their peers.

While the findings are promising, Sylvis pointed out that communication regarding risk appetite remains crucial for successful ERM implementation. The survey's findings indicate an increasing trend to emphasize the need to clarify organizational risk appetites moving forward into the next year.

About AFERM

AFERM serves as a vital forum for professionals in the federal Enterprise Risk Management domain, facilitating dialogue around pertinent issues, offering educational programs, and advocating for advancements in the field. Their commitment reflects not only a focus on individual members but also on broader governmental accountability, ensuring that risk management aligns with organizational objectives.

About Guidehouse

Guidehouse stands as a global leader in consultancy services dedicated to both public and commercial sectors. By disrupting traditional consulting frameworks, it strives to deliver tailored solutions designed to enhance innovation, resilience, and growth across various industries, including national security, financial services, healthcare, energy, and infrastructure. With over 18,000 employees, Guidehouse continuously works to support clients through the intricacies of their challenges, delivering solutions that yield significant change.

The maturation of ERM practices within government organizations signifies a proactive approach to risk management, fostering enhanced accountability and risk mitigation capabilities that are essential in today's uncertain climate.