Enterprise Risk Management ( Erm )

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Introduction

➢ What is Enterprise Risk Management (ERM)?

Enterprise Risk Management (ERM) is process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effect of risk on an organizations capital and earnings.

ERM expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks.

➢ Benefits of Enterprise Risk Management In Finance

• Financial Incentives
Awareness of risks involved in process will help align resources which may increase productivity and revenues, as well as improve service delivery capabilities.

• Enhanced Internal Communication
Effective communication lead to enhanced staff morale and help promote teamwork.

• Improved decision making
ERM helps stimulate increased accountability, defined success criteria, improved performance reporting and clearer performance measurement.

• Enhanced Partnerships
Enterprise Risk Management process highlights opportunities for working across the enterprise on providing integrated response to multiple tasks and pathways to seizing opportunities.

➢ Enterprise Risk Management (ERM) framework

Any organization implementing ERM should develop an overall framework to ensure that the fundamental requirements are addressed. The decisions are generally to adopt published framework or develop a customized framework based on the unique requirements of an organization.
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