Enterprise Risk Management (ERM)
5 Hours, 12 June 2023, 4:00 PM-9:00 PM
What Is Enterprise Risk Management (ERM)?
Enterprise risk management (ERM) is a methodology that looks at risk management strategically from the perspective of the entire firm or organization. It is a top-down strategy that aims to identify, assess, and prepare for potential losses, dangers, hazards, and other potentials for harm that may interfere with an organization's operations and objectives and/or lead to losses.
KEY TAKEAWAYS
- Enterprise risk management (ERM) is a firm-wide strategy to identify and prepare for hazards with a company's finances, operations, and objectives.
- ERM allows managers to shape the firm's overall risk position by mandating certain business segments engage with or disengage from particular activities.
- Traditional risk management, which leaves decision-making in the hands of division heads, can lead to siloed evaluations that do not account for other divisions.
- The COSO framework for enterprise risk management identifies eight core components of developing ERM practices.
- Successful ERM strategies can mitigate operational, financial, security, compliance, legal, and many other types of risks.
