 - Enterprise risk management (ERM) is the process of planning, organizing, leading, and controlling the activities of an organization in order to minimize
the effects of risk on an organization's capital and earnings.
Enterprise risk management expands the process to include not just
risks associated with accidental losses, but also financial, strategic,
operational, and other risks.
In recent years, external factors have fueled a heightened interest by
organizations in ERM. Industry and government regulatory bodies, as
well as investors, have begun to scrutinize companies' risk-management
policies and procedures. In an increasing number of industries, boards
of directors are required to review and report on the adequacy of
risk-management processes in the organizations they administer.
Since they thrive on the business of risk, financial institutions are
good examples of companies that can benefit from effective ERM. Their
success depends on striking a balance between enhancing profits and
managing risk.
Business risk management, holistic risk management, and strategic risk management are synonyms.
| LAST UPDATED: |
05 Jun 2007
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