**4. Results**

A salient challenge for risk practitioners is the reluctance of business units to accept new ERM initiatives or deeply involve the ERM unit in decision-making. Practitioners consider the recurrent misperception of ERM as an administrative burden pivotal for this change resistance. Additionally, individual and organisational bias, including understating risks not yet encountered by the organisation, backs misperception. Organisational knowledge domains aggravate the correction of business units' appreciation of ERM.

Regarding the company's top management, risk practitioners realise challenges through insufficient management commitment to ERM. Consequently, the ERM unit is insufficiently involved in the strategic decision-making process. Top management representatives' political and social concerns related to risk documentation and perception of their authority further undermine the ERM's strategic relevance. Risk practitioners apply practices substantiating in four episodes to overcome these challenges. **Table 2** summarises the findings, including the number of participants who mentioned the specific practice.


#### **Table 2.**

*Practice episodes and practices applied by risk practitioners.*

### **4.1 Creating shared understanding**

The first practice episode concerns creating a shared understanding between the ERM and business units. Risk practitioners develop profound and comprehensive business knowledge to enable effective risk identification, making sense of received information, and aligning the ERM system with business requirements and objectives. One interviewee summarised: 'You must have seen the way things work to understand how risks arise, to discern how to report risks effectively, and implement the risk management processes to work properly'.

Reciprocally, practitioners qualify stakeholders and create risk awareness through interdisciplinary workshops, informal dialogues and interactive training sessions to surmount boundaries of knowledge domains. They use purposeful presentation and shared language to transfer risk knowledge effectively.

Practitioners capitalise on simplification and contextualise risk theory using psychological research. Additionally, they offer examples of risk management failures in the company's business environment: 'We conduct workshops that include some fun– examples from Kahneman and Tversky, or Ralf Dobelli–and classic thinking mistakes concerning our industry. These examples support that people better understand what risk management is about and what traditional mistakes can happen. These topics increase the dialogue'.

#### **4.2 Emphasising value creation**

The second practice episode aims at creating business value. Risk practitioners holistically emphasise aspects from a company's point of view. They prioritise risks with high importance on the company level while leaving the analysis of more local risks on the business unit's level. Besides effective resource use, this prioritisation acknowledges business domain expertise and esteems cooperation. In this vein, risk practitioners consciously decide about the amount and content of information presented to avoid communication overloads: 'I would always minimise or reduce communication to the essentials. This means I only communicate as much as necessary to avoid overwhelming others with all the details'.

Participants leverage information by combining risks and business objectives, such as profitability or strategic relevance. They consciously capitalise on the advantage of a central unit for rendering interrelations between the company's risks. By experimenting with visual representations for presenting intricate risk knowledge, risk practitioners continuously optimise communication across business units and with management. They constantly create and reconfigure risk tools to further increase the sophistication of risk analysis and decisions. Risk practitioners utilise these tools to increase the effectiveness of risk communication with business units.

Furthermore, risk practitioners campaign risk discussions with business units to enhance company-wide risk perspectives. With these discussions, they anticipate potential conflicts of interest and try to find commonalities and differences in business units' perspectives on risk. While practitioners aim at joint organisational perspectives, they appreciate different perspectives to holistically inform decisions and reduce bias and groupthink in the decision-making process.

#### **4.3 Exerting leadership practices**

Exerting leadership practices represent the respondents' third practice episode. Interviewees reinforce their influence in decision-making through deliberate networking and demonstrating expertise. For this purpose, they use assertive communication and openly and confidentially express opinions: 'When I talk about risks with the Board of Management, I express my own opinion, for instance, by telling my suggestion. In this way, the board recognises me as a competent advisor'.

Risk practitioners cultivate dialogue with business units by establishing and encouraging conversations. These dialogues are encouraged by offering the ERM unit's availability for talks beyond official meetings and by assuring confidential treatment of information on request. To reinforce direction in decision-making, interviewees focus on how they present information. These considerations include describing information in the language of business units, outlying available decision options and incorporating business objectives.

*Communication and Leadership for Improving ERM Effectiveness DOI: http://dx.doi.org/10.5772/intechopen.107066*

Risk practitioners apply a cooperative communication style to avoid or manage tensions and ensure trustworthy cooperation with business units. In the same vein, they use ownership over information, such as risk reporting, carefully and only as the last resource to uphold trust and maintain a cooperative relationship with business units. One interviewee exemplified this: 'You have to work with people because you cannot achieve anything when working against them'. However, risk practitioners defend positions and resist undue requests from business units to champion sound risk management approaches: 'I try to be as flexible as possible in the communication with business units. However, certain things must not be adjusted'.

#### **4.4 Managing relationships**

Risk practitioners' relationship management practices aim to overcome change resistance by building trust, networking and partnering with the business. Being transparent about the ERM unit's assumptions and the intended use of received data is a routine practice. Respondents demonstrate a level playing field to distract fears that they could use information against business units. For this reason, they use factual and objective communication to build trust and avoid early judgements.

Participants emphasised the importance of partnering with the business to overcome change resistance and misperception of the ERM. Therefore, they proactively support business units in solving risk-related problems. Participants also create win-wins with other business departments through purposeful cooperation and deliberately avoid making the impression of box-ticking. As a result, they counter the perception of ERM as a valueless administrative burden: 'When you are seen as a consultant and offer solutions to specific issues, then you win the people'.

Establishing connections with business units through informal meetings and talks and active networking is a regular practice. Participants strive to develop casual relationships to overcome change resistance and reduce conflicting interests: 'You try staying in contact and up to date by knowing what is going on in the department'.
