Standard & Poor's Ratings Services has issued a progress report on its effort to incorporate enterprise risk management assessments into its ratings of non-financial corporations.

S&P's credit analysts have been including specific ERM discussions in their regular meetings with the companies that they rate since the third quarter of 2008, focusing on risk-management culture and strategic risk management as two "universally applicable" aspects of ERM, according to the report, "Progress Report: Integrating Enterprise Risk Management Analysis Into Corporate Credit Ratings."

Among other things, S&P has been reviewing risk-management structures, the roles of staff responsible for risk management, internal and external communication, and risk-management policies and metrics.

"The turbulence in the global credit markets has provided us an opportunity to discuss and observe the results that risk management practices in real time," the report states. "However, we are conducting this phase of information gathering with deliberation and care to defer making conclusions about ERM's value until after we have conducted a sufficient number of meaningfully detailed discussions."

"We don't see ERM analysis radically altering our existing credit rating opinions," co-authors Steven Dryer and Amra Balic write. "We expect its value to be incremental in many cases, negligible in a few, and eye opening in some. We believe that this analysis will result in some rating and outlook changes once we have been able to benchmark companies against each other over time."

The report includes the seven primary questions that analysts ask management teams concerning ERM and some of S&P's preliminary findings. RatingsDirect subscribers can access the report at www.ratingsdirect.com. Non-subscribers can purchase a copy of the report by calling (212) 438-9823 or by e-mailing research_request@standardandpoors.com.

S&P plans to publish another progress report by the end of 2009 and to incorporate ERM references into individual corporate credit rating reports in 2010.