Explanation:
A major immediate challenge when transitioning from a traditional, decentralized 'silo' risk management approach to an Enterprise Risk Management (ERM) framework is managing the organizational and cultural change. Risk management professionals who were previously embedded and enjoyed autonomy within their respective business units may view the new centralized ERM framework as an infringement on their territory. This often leads to friction or conflict between the existing unit-based risk managers and the newly established corporate ERM staff.
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Q.93 A life insurance company recruits a chief risk officer to develop an ERM framework and oversee its implementation and maintenance. Previously, the company has always had a "silo" approach to risk management and has risk management professionals embedded within business units. Which of the following presents an immediate challenge the newly appointed CRO is most likely to face?
A
A raucous welcome by other executives such as the CFO and the CEO.
B
Developing a robust ERM framework.
C
A conflict between the ERM function staff and risk professionals embedded within business units.
D
Difficulties understanding the company's objectives and business model.