VANCOUVER, British Columbia—As part of its enterprise risk management program, payroll and human resource services company Paychex Inc. developed a peer review program affecting all aspects of the organization.

The Paychex Peer Process Program, or P4, provides the Rochester, N.Y.-based firm with an independent evaluation of its business risk processes, said Paychex's Frank Fiorille, director of ERM, and Erika McBride, manager of risk modeling and review, during a session at the Risk & Insurance Management Society Inc.'s 2011 Annual Conference & Exhibition.

P4 holds true to a basic ERM tenet: overcoming organizational silos by using employees from various departments to “assess the adequacy of existing policies, practices and controls to acquire astute product strategies and facilitate efficient and responsible processing,” Mr. Fiorille said during the session.

“We have a lot of risk,” Mr. Fiorille said during the session, noting that compliance, operating, audit, credit and banking risks are everyday exposures for Paychex.

The peer review program is “really trying to uncover and bring to senior management's attention key risks within that business or product,” said Mr. Fiorille, who reports directly to Paychex CEO Martin Mucci and leads the risk management team.

The P4 review process begins by identifying a possible risk area—a product or process within the organization—by preparing information on that area through due diligence and quantifying it with business statistics. The P4 lead reviewer will meet with the head of that area to gather more information and understand his or her concerns and challenges.

Once that information is gathered, a guest reviewer is selected to lead the P4 process, which usually is someone fairly knowledgeable about risk, but someone who is not married to the product or process. A P4 team is put together with individuals from different areas of the organization who often share similar concerns.

The P4 team works with the business unit for a week, and interviews their peers to understand the unit's function. The team then writes a detailed review of the product or process and shares it with the unit's leader.

“We work with the business all week on trying to really crystallize what that finding is, or what that issue is, or what that opportunity is,” Mr. Fiorille said.

During the final phase of the review process, the team consolidates its findings and publishes a final report, which is distributed to the CEO, among others. Depending on the findings, follow-up is conducted based on the team's action plans.

The P4 program has generally been well-received by employees, Mr. Fiorille said. Many times, business unit leaders request a peer review to get a better understanding of their risks, he said.

“To me, that is the highest validation that it's working,” Mr. Fiorille said.