NEW YORK—Building a culture of innovation requires not only leadership and communication but also acceptance of failure, attendees of the inaugural Risk Management Summit learned.

The summit, presented by Business Insurance March 8-9 in New York, brought together dozens of risk managers from some of the largest companies in North America and Europe to discuss four core topics: innovations in risk management, global programs and risks, global regulatory and legislative developments, and counterparty risks. The program included expert speakers on each topic, risk managers-only roundtable discussions and panels featuring senior executives from leading insurance industry companies.

Lori Jorgensen, senior director of finance and risk management at Redmond, Wash.-based Microsoft Corp., outlined her risk management department's approach to innovation.

Creating a culture of innovation in risk management calls for leadership, or “tone from the top,” she said. Other key elements are organization, or “smart people using tools in a dynamic process,” and communication, specifically a systemwide commitment to discuss innovation, Ms. Jorgensen said.

One of the most important elements is “empowerment. Experimentation matters, and you have to allow for failure” along the way to achieving innovative solutions to problems. Another important factor is knowledge management, the process by which an organization captures, maintains and shares findings, she said.

Ms. Jorgensen explained that Microsoft's risk management department employs a “360-degree exposure view,” providing a holistic view of risks facing the company's business operations. This approach helped reduce a significant exposure for Microsoft as the financial crisis hit in 2008, Ms. Jorgensen said, when her department applied the view to accounts receivable. That enabled Microsoft to change its relationships with riskier partners, she said.

Additional reporting on the Risk Management Summit will appear in the March 29 and April 5 issues of Business Insurance. For additional information, please go online to www.BusinessInsurance.com/RMSummit.