ERM Fast Facts

Enterprise Risk Management Defined

Enterprise risk management (ERM) is the process of coordinated risk management that places a greater emphasis on cooperation among departments to manage the organization’s full range of risks as a whole. ERM offers a framework for effectively managing uncertainty, responding to risk and harnessing opportunities as they arise.

Importance of ERM

There are several checkpoints that drive the need for enterprise risk management, which include:

• Greater transparency
• Financial disclosures with more strict reporting and control requirements
• Security and technology issues
• Business continuity and disaster preparedness
• Focus of rating agencies
• Globalization in a continuously competitive environment

Benefits of ERM Framework

No matter how well planned and executed, risk management procedures cannot always guarantee results. Nevertheless, using the enterprise risk management framework can increase an organization’s and its shareholders’ confidence that they will achieve their objectives. ERM offers a numbers of benefits:

• Align risk appetite and corporate strategy
• Links growth risk and returns
• Improves risk responses
• Reduces operational surprises and losses
• Recognized and acts upon opportunities
• Deploys resources effectively

 

Learn more about enterprise risk management by downloading an ERM Fact Sheet.