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Integrated Risk Management: Navigating Operational Efficiency to Strategic Excellence
- Julien Haye
- Oct 2, 2023
- 13 min read
Updated: Jun 28
Building trust and earning a seat at the decision-making table is a challenge many Chief Risk Officers and risk practitioners face. - Julien Haye
I’ve worked with risk functions that meet every regulatory requirement and operate with mature frameworks. Many firms invest heavily in risk management approaches, yet struggle to create an effective Integrated Risk Management (IRM) structure that connects strategic intent with operational execution.
This article introduces the integrated risk management programme we use with clients to address that disconnect. Managing risk at both operational and strategic levels delivers tangible, connected benefits. It improves efficiency, compliance, and resilience in daily activities, while also reinforcing strategic alignment, stakeholder confidence, and long-term value creation.
Together, these outcomes demonstrate the true value risk management can bring when integrated effectively across the organisation.
TABLE OF CONTENTS:
Why Risk Functions Often Struggle to Influence Strategy
Risk teams often have the resources, the expertise, and the willingness to make an impact. Many operate with well-developed frameworks, policies, and control structures. They meet regulatory expectations and can demonstrate maturity across traditional risk and compliance dimensions. Yet they remain peripheral to the decisions that shape the future of the business.
This issue is more structural than tactical. It reflects how risk management is defined and positioned within the organisation from the outset.
Risk is Often Seen as a Support Control Function, Not a Strategic One
In many firms, risk management was established to address regulatory requirements. As a result, its primary function has been to monitor compliance and reduce downside exposure. Capabilities and skillsets have been built around this outcome. While necessary, this positioning reinforces a protective role, often with a conservative stance. It does not create the space for risk teams to support forward-looking decisions that drive growth or transformation. And from experience, it is not a given that incumbents would be able to operate such a paradigm shift without help. In some extreme cases, they may not even recognise that change is needed.
Governance Structures Reinforce Oversight, Not Enablement
Even where governance models have matured, the focus often remains on assurance. Assurance refers to the process of confirming that risks are being identified and managed in line with agreed frameworks, that controls are operating as expected, and that regulatory requirements are being met. It provides comfort that the basics are in place.
Oversight, however, plays a broader role. It involves engaging with how decisions are made, assessing whether the right risks are being prioritised, and guiding strategic direction in line with risk appetite. Effective oversight supports both challenge and enablement. It requires involvement in decisions before they are finalised, not just review after they occur.
In many organisations, risk functions are still structured around assurance. They monitor policies, highlight breaches, and report on incidents. While these activities are necessary, they are often disconnected from the choices that shape the business. Without a clear role in strategic discussions or resource planning, risk teams remain observers rather than contributors.
Ready to turn risk into a lever for strategic impact? Discover how empowered teams drive meaningful risk transformation.
Strategic Decisions Are Made by Those Who Own Resources and Outcomes
Influence follows ownership. Those who manage product lines, budgets, or customer outcomes tend to shape the strategic agenda. Risk professionals may be consulted, but without a clear role in investment planning or performance management, their input is often seen as advisory rather than essential.
Risk Insight Is Fragmented Across the Organisation
Operational teams manage local controls and respond to incidents. Audit functions review assurance activity. Boards and committees review aggregate dashboards. But there is often no single, integrated view of how risk connects across these levels. This fragmentation makes it difficult to support decisions that depend on joined-up insight. A typical example of that is when the audit function, and potentially the compliance function, produce their own risk universe to support their own assurance activities. In most cases, we have seen the same universe being reported up to the board, creating significant redundancies and potential confusion along the way.
👉 Read more: Risk Culture and the Problem of Cultural Silos
What Gets Measured Shapes What Gets Valued
Risk reporting is often focused on compliance metrics, incident counts, and control performance. These indicators are useful for tracking exposure but do not explain how risk affects strategic priorities. Without a clear link between risk measures and business outcomes, it is difficult for leadership to treat risk as a source of insight rather than as a checklist.
Shifting the Starting Point
The issue is not that risk functions are underperforming. It is that they have been set up to operate alongside strategy, not within it. Aevitium LTD's Integrated Risk Management begins with a different premise. It views risk as a lens for better strategic and operational decisions, not just as a mechanism for avoiding failure.
This shift in thinking is critical. It is what enables risk management to move beyond technical execution and become a meaningful contributor to the organisation’s long-term success.
What’s the biggest barrier to making risk management more strategic in your organisation?
Lack of clear vision and purpose
Risk not embedded in decision-making
Fragmented frameworks and ownership
Perception of risk as a compliance function
What is Integrated Risk Management?
Many of the challenges risk teams face today do not come from a lack of frameworks or technical knowledge. They stem from how risk is understood, structured, and applied within the organisation. Integrated Risk Management offers a practical path to shift risk functions from reactive observers to active contributors to strategy and performance. Unlike traditional frameworks that treat risk in silos, IRM includes risk identification, evaluation, and mitigation across strategic and operational levels. It enables leaders to mitigate risks in real time, not just after review.
Gartner defines Integrated Risk Management as
“a set of practices and processes supported by a risk-aware culture and enabling technologies, that improves decision making and performance through an integrated view of how well an organisation manages its unique set of risks.”
At Aevitium LTD, we build on this foundation and combine it with practical insight to support risk transformation. Our IRM framework is designed to help organisations break out of reactive cycles and connect risk management to strategic and operational priorities. It draws on the structural strengths of Enterprise Risk Management, while embedding integration into how decisions are made and actions are taken across the business.
IRM provides a unified view of risks and required management practices. It replaces fragmented activity with clarity, consistency, and relevance. It brings risk closer to the business by embedding insight into both strategic direction and day-to-day execution.
This is about rethinking how risk supports the business. When risk insight is timely, connected, and relevant, it moves from being a control activity to becoming a source of strategic advantage.
Integrated vs Enterprise Risk Management: What Leaders Need to Know
Enterprise Risk Management (ERM) and Integrated Risk Management (IRM) are often used interchangeably, but the difference between them matters. Both seek to manage risks across the organisation, yet they reflect different assumptions about how risk should influence decision-making, structure, and culture.
ERM may provide oversight, but often struggles to embed responses to operational risks or adapt to shifting compliance requirements. It supports alignment between risk appetite and strategic objectives. But it tends to look backwards or rely on periodic planning cycles. IRM, by contrast, is designed to deal with uncertainty. It enables teams to respond to change in real time, connect signals across silos, and anticipate how emerging risks could affect future outcomes.
Organisations often find that ERM frameworks are in place, but that risk activity remains fragmented. IRM addresses this disconnect by embedding risk into day-to-day decision cycles and integrating strategic, operational, and technology layers into one coherent view.
Below is a high-level comparison of the two approaches:
ERM vs IRM – Key Differences
Dimension | Enterprise Risk Management (ERM) | Integrated Risk Management (IRM) |
Core Focus | Strategic alignment and oversight | Operational integration and decision support |
Primary Driver | Governance and assurance | Technology, culture, and workflow |
Risk Treatment | High-level appetite and policy design | Real-time mitigation and cross-functional response |
Decision-Making Involvement | Periodic and senior-level | Embedded in daily operations and tactical choices |
Use of Technology | Framework-based with manual inputs | Digital platforms, analytics, automation |
Cultural Role | Risk awareness at leadership level | Risk-informed culture across all levels |
Approach to Uncertainty | Focused on known risks and defined scenarios | Designed to navigate ambiguity, emerging risks, and change over time |
Both ERM and IRM have value. But in a world where foresight is essential and uncertainty is the norm, IRM provides a practical foundation to act earlier, adapt faster, and align decisions with what matters most.
At Aevitium LTD, our focus is on helping organisations move beyond fragmented control environments and frameworks that look backwards. We believe in enabling risk functions to become trusted partners in shaping the future of the business. That requires integration, and it requires looking beyond assurance to ensure that risk activities operate as a connected whole. It means embedding insight into the flow of decisions, not reporting on them after they have already been made.
Bridging Strategy and Operations: Applying the Aevitium Integrated Risk Framework
Managing risk effectively means connecting operational and strategic levels of activity, aligning decisions across time horizons, and embedding risk into the way the organisation works.
At Aevitium LTD, we use a modular Integrated Risk Framework designed to support this connection. It enables organisations to build practical alignment between risk activity and business performance. Each component can be tailored to the organisation’s maturity, context, and priorities whether the need is operational stability, strategic clarity, or both.
The framework supports alignment not just at the enterprise level, but within each business unit, ensuring that operational activities remain consistent with strategic direction and regulatory compliance standards.
The framework addresses two distinct but interconnected areas:
Strategic Management of Risk
Strategic management of risk focuses on long-term goals and direction. It ensures that risk is considered as part of strategy-setting and resource allocation, rather than as a reactive or isolated activity.
Key benefits include:
Strategic Alignment: Ensures that risk activity supports the organisation’s purpose and long-term objectives.
Competitive Advantage: Enables the organisation to respond early to market shifts, regulatory developments, and emerging issues.
Stakeholder Confidence: Demonstrates that leadership is taking a forward-looking approach to risk, reinforcing trust and credibility.
Note: Strategic Management of Risk ≠ Strategic Risk Management
Strategic risk management is often treated as a category of risk. Strategic management of risk is broader. It’s about embedding risk thinking into how strategy is set, decisions are made, and resources are allocated.
This distinction matters. One organises risk. The other shapes how the organisation navigates uncertainty.
Operational Management of Risk
Operational management of risk focuses on how risks are identified and managed in daily activities. It supports the safe, efficient, and consistent delivery of services and processes.
Key benefits include:
Efficiency and Effectiveness: Reduces friction and error, supports process reliability, and enables performance.
Safety and Compliance: Ensures that regulatory, legal, and internal standards are met.
Continuity and Resilience: Helps the organisation withstand and recover from disruption.
A Structured and Flexible Framework
The Aevitium Integrated Risk Framework includes ten foundational components. These can be applied in full or adapted incrementally, depending on the organisation’s maturity, capacity, and strategic intent.
Risk Vision and Mission – Define the purpose and role of risk in supporting the organisation’s goals.
Risk Strategy and Objectives – Establish how risk will contribute to value, resilience, and delivery.
Risk Governance and Leadership – Clarify who is accountable for what, and ensure leadership supports risk-informed thinking.
Risk Assessment and Analysis – Identify and prioritise risks that matter, across both operations and strategic outcomes.
Risk Integration in Decision-Making – Ensure that risk considerations are embedded in planning, budgeting, investment, and delivery.
Risk Capabilities Assessment – Evaluate the organisation’s ability to manage risk effectively and identify gaps.
Capacity Building and Skill Development – Strengthen individual and collective ability to manage risk through relevant training and support.
Communication and Alignment – Support consistent understanding and shared language around risk goals and expectations.
Monitoring and Reporting – Track outcomes and performance using meaningful indicators that link to both operational performance and strategic direction.
Continuous Improvement and Learning – Use experience, feedback, and change in context to refine and improve how risk is managed.
This is not a linear model. The order and emphasis of each component should reflect the organisation’s needs. What matters is that risk activity is aligned, intentional, and focused on supporting the organisation's success.
Contrasting Operational and Strategic Management of Risks
The Aevitium Integrated Risk Framework is designed to operate across both strategic and operational layers of the organisation. But to do so effectively, it’s essential to understand how these two domains differ in focus, scope, and execution.
The table and visual below highlight key distinctions that often go unnoticed but are critical to aligning risk with decision-making at every level.
Dimension | Strategic Management of Risk | Operational Management of Risk |
Scope and Focus | Long-term goals and strategic objectives | Day-to-day tasks and process execution |
Time Horizon | Extended time horizon; often forward-looking | Immediate to short-term time frame |
Decision-Making | Senior leadership and board | Operational managers and frontline teams |
Risk Identification | External drivers, market trends, technology, regulation, reputation | Internal processes, controls, resources, people |
Mitigation | Strategic planning, diversification, partnerships, investments | Operational controls, procedures, and safeguards |
Performance Metrics | Progress against strategic objectives, market position, customer trust | Efficiency, productivity, compliance, and service continuity |
From Framework to Practice: Applying the Building Blocks in Context
The ten building blocks are not intended to be implemented in a strict sequence. They reflect the foundational elements of a mature and integrated approach to risk, but the path to embedding them depends on the organisation’s context, constraints, and priorities.
With some clients, the entry point may be redefining the risk department vision or mission to give them purpose. For others, the focus may be on improving decision-making or building internal capability. For instance, we were recently approached by a major investment management firm to help them develop new risk capabilities as part of a wider business transformation. What matters is not where you begin, but how these areas come together to support a coherent and effective approach.
Although clients may need to assess and strengthen their risk capabilities, we typically advise starting with the why and the what—clarifying the vision, mission, and strategy—before moving into the how. This ensures that capability development is aligned to purpose and grounded in strategic intent.
This framework lies in its flexibility. It supports strategic management of risk by aligning vision, leadership, and long-term decision-making. It supports operational management by strengthening execution, monitoring, and adaptability. And it connects both levels through communication, capability, and continuous learning.
Whether used to define a full transformation roadmap or to strengthen a specific area of maturity, the building blocks provide a practical reference for organisations seeking to make risk more meaningful, connected, and effective.
📊 Ready to Assess Your Risk Maturity?
If you're unsure where to begin with risk integration, we offer a structured offline diagnostic to assess your current maturity across vision, governance, capabilities, and decision-making.
👉 Contact us to book a short discovery session and get tailored insights using our 10 Building Blocks framework.
A digital version of the tool is in development.
Case Studies in Practice: Applying the Framework
Translating a framework into impact depends on context. While the entry point for some clients may be risk vision and governance, others might focus on improving decision-making, capabilities, or assurance. Below are two examples that illustrate how the Aevitium framework has been applied to support real-world transformation.
Organisations often approach risk transformation from different starting points. Some begin with governance, others with data or reporting. But in many cases, the most effective entry point is clarity of purpose.
Case Study 1 - Risk Vision and Mission Statement
We were recently engaged by a global investment management firm to support the development of new risk capabilities as part of a wider business transformation. Rather than begin with controls or infrastructure, we worked with the client to define a clear risk vision and mission. This helped reposition the function internally and provided a strategic anchor for subsequent capability development. It also allowed the risk team to work directly with business units to prioritise and mitigate risks, while ensuring full alignment with regulatory compliance expectations.
We explored this approach in more detail in a previous article, which includes a full case study and practical guidance.
Read the full article: How to Develop a Risk Vision Statement
Case Study 2 - Reframing the Risk Function to Rebuild its Foundations
As a senior risk executive, I was responsible for leading the non-financial risk function and driving its transformation. What began as a mandate to modernise evolved into a broader opportunity: to realign the purpose, strategy, and capabilities of the function itself.
We began by defining a clear vision and mission for risk. From there, we articulated the strategy, clarified governance, and developed a detailed capability inventory across oversight, execution, assurance, and service delivery. This catalogue has been completely overhaul to comprehensively cover the end to end management of risks —covering over 100 capabilities—
provided the foundation for a new operating model and underpinned the business case for change.
Many of the principles and tools developed during that work now inform how we support clients through risk transformation at Aevitium, including our approach to embedding the Three Lines Model.
Where Do You Stand?
Every organisation approaches risk differently shaped by its goals, culture, and level of integration across teams.
That’s why we treat maturity not as a scorecard, but as a way to open the right conversations. Our diagnostic draws on the Aevitium framework to help risk leaders step back, look at the bigger picture, and assess how well their current setup supports informed, aligned, and timely decisions.
Whether you're reviewing your governance structure, rethinking your operating model, or planning a wider risk transformation, this can serve as a useful reference point for what comes next.
👉 Get in touch to explore the diagnostic or use it as part of a broader strategic review.
Closing Remarks
I believe that being able to effectively articulate how risk management activities answer these two fundamental dimensions is critical to (re)position risk management functions as a strategic enabler and earn a “sit at the table”.
Clarity of vision and purpose strengthens alignment, supports prioritisation, and helps shift the perception of risk from compliance activity to strategic contribution. That shift requires intention and leadership, not just process improvement.
Frequently Asked Questions (FAQs)
What is Integrated Risk Management (IRM)?
Integrated Risk Management is a practical approach to aligning risk management with both strategic and operational decisions. It moves beyond compliance to embed risk thinking into planning, resource allocation, and execution—helping organisations act earlier and adapt faster in the face of uncertainty.
How is IRM different from Enterprise Risk Management (ERM)?
ERM focuses on oversight and reporting, often using periodic cycles and known risk categories. IRM integrates risk into day-to-day operations, enabling real-time decision support and cross-functional insight. IRM is more adaptive, particularly in complex or fast-changing environments.
Why do risk functions struggle to influence strategic decisions?
Many risk teams operate with strong frameworks but lack clarity of purpose and strategic alignment. Without a defined role in decision-making or ownership of business outcomes, their input remains advisory rather than influential.
What does strategic management of risk mean?
It means embedding risk considerations into how strategy is shaped—not just managing strategic risks as a category. This includes setting vision and purpose, aligning priorities, and ensuring risk informs key decisions, not just control activities.
What are the benefits of IRM?
IRM helps organisations:
Align risk with strategic objectives
Improve decision quality
Break down silos
Strengthen resilience and adaptability
Build trust with boards, regulators, and stakeholders
Where should an organisation start with IRM?
Start by clarifying your risk vision and purpose. Understand how current capabilities support or constrain that vision, and then build the elements that connect intent with execution. The sequence should reflect your strategic priorities—not a checklist.
How do you measure the maturity of risk integration?
Maturity is measured by how well risk activities are aligned across leadership, governance, capabilities, and culture. A diagnostic approach can reveal whether risk insights are informing decisions—or being reported after the fact.
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