Enterprise risk management and training challenges

Most boardrooms think enterprise risk management (ERM) is safe as long as the right frameworks are in place. Yet even well-governed organisations can be blindsided by non-technical failures, from AI projects that silently drift into bias and reputational crises to fragile supply chains exploited by cyber-attacks.

 

In truth, most ERM failures today are not about missing frameworks. They are about missing capability, especially where training does not equip people to see, interpret and act on emerging threats. On paper ERM can look robust, yet on the ground it can be weak, quietly exposed by underpowered training.

 

Training the risk radar

 

ERM increasingly fails not because policies are missing but because people lack risk literacy. Risk has shifted from something static and technical to something deeply cognitive and behavioural. Employees are now expected to exercise judgement under uncertainty, make ethical calls when using AI tools and spot weak signals long before they become reportable incidents. Recent cases of staff feeding sensitive data into generative AI systems without malicious intent illustrate how quickly capability gaps can become enterprise threats.

 

Yet training has not kept pace. Many organisations still rely on compliance-heavy, box-ticking modules delivered identically to frontline staff, senior managers and board members. This ignores the reality that risk decisions look radically different at each level. A procurement manager interpreting supplier distress signals needs different training from a board weighing strategic exposure to geopolitical disruption.

 

What is missing is risk sensemaking: training people to interpret ambiguity, understand trade-offs and anticipate second-order consequences. Technical competence explains how systems work, but risk capability determines how humans behave when those systems fail. Without that capability, ERM is effectively blind as it has instruments, but no radar.

 

From frameworks to front lines

 

ERM frameworks most often fail at the precise moment real decisions are made. Risk registers may look impressive in board packs, yet frontline teams still improvise under pressure. The “last-mile problem” of risk management is visible in incidents where staff bypass controls to keep operations moving, later described as human error rather than predictable behaviour.

 

Training frequently fails to travel with responsibility. Risk ownership is pushed downwards, but capability rarely follows. Middle managers, expected to translate abstract risk appetite into day-to-day judgement, are often the least supported. UK regulatory reviews have repeatedly noted that escalation failures stem from uncertainty about when and how to act, not ignorance of policy.

 

More effective organisations are shifting towards role-specific risk training. Instead of generic ERM education, they use scenario-based learning built around live business dilemmas such as a cyber-alerts during peak trading, a supplier showing early signs of distress or an AI system producing unexpected outputs. Short, embedded micro-learning nudges now replace annual training events.

 

As AI, automation and dashboards accelerate decision-making, risk moves faster than understanding. If training does not meet people where decisions happen, frameworks become simply theatre.

 

The silent exposure

 

Underinvestment in risk training creates a form of silent exposure that rarely appears on any risk register until damage is already done. Organisations accumulate what might be called training debt: capability gaps that quietly compound operational and reputational risk. Regulatory breaches linked to poor judgement, staff misusing AI tools without understanding data or bias implications and cultural failures where concerns are not escalated all share a common root... inadequate preparation for real-world decisions.

 

This exposure is magnified during crises. Post-incident reviews of cyber-attacks and supply-chain disruptions repeatedly show that policies existed, but people were unsure how to respond under pressure, delaying action when speed mattered most. These failures are often mislabelled as execution issues rather than training failures.

 

Forward-looking organisations are beginning to apply capability stress-testing alongside traditional risk testing. Instead of asking whether controls exist, they test whether people can act by asking whether teams can recognise early warning signs, challenge assumptions and escalate decisively. This contrasts starkly with visible risks such as cyber or financial exposure, which are measured obsessively, while invisible risks, including judgement, confidence and escalation, are assumed away. The most dangerous risks are often the ones organisations believe training has already solved.

 

What forward-looking organisations are doing differently

 

Leading organisations are moving beyond training as a periodic event and treating capability as infrastructure that can be built, maintained and stress-tested over time. Risk training is becoming strategic, differentiated by role and continuously refreshed as technologies, regulations and threats evolve. Success is no longer measured by completion rates or attendance but by behavioural readiness. Can people recognise weak signals, interpret ambiguity and act decisively when it matters? This reframes ERM from documentation to performance. In today’s risk landscape, the strongest control is not a policy but a capable human being.

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Why not get your team certified in risk management with AGRC as a stepping stone towards building a more robust and efficient ERM team? Find out more here: Study With AGRC – The Association of Governance, Risk and Compliance (AGRC)