Management Control Systems : Enterprise Risk Management

Enterprise Risk Management (ERM) is a series of processes used to identify risk, implement strategies to address risk, and monitor impact on the organization. Indeed, an effective ERM will consist of a corporate profile, which is a record of key risks that would hinder the organization in achieving their key objectives (Fraser & Simkins, 2010). Ideally, the risk profile is created as a tool to communicate with the Board of Directors, but may be used as a means of communication with all levels of management (Bethel, 2016). Typically, there are variations of the risk profile based upon the level of management, such as duration, types of risk, and purpose (Fraser & Simkins, 2010).

Enterprise Risk Management (ERM) started to steady down at the end of 1990s and has been mostly recognized as the expectations for the effective management and corporate governance. (Fraser and Simkins, 2016) This report divided into 4 parts base on the understanding of ERM and Marks & Spencer (M&S) 2016 Annual report. Firstly, a literature review of ERM to determine the appropriate comprehension of ERM in M&S. Secondly, this report introduced basic situation of M&S Corporation to establish the basis of risk management. Thirdly, an analysis of key risks is the core part of this report. Fourthly, this report analysed the difficulties associated with managing data upon risk intelligence, which needed to pay attention to. All

business: Managing risk in a complex and connected world. Revue Management & Avenir, (74), 159-173. Retrieved from Business Source Complete Database.

According to Habib (2006), risk management entails a process of evaluating overall goals of an organization's against risks attached to planned activities. To achieve this component in running of a business, measures have been devised to identify and analyze the uncertainties associated. This paper discusses the techniques devised by Dr, Kallman in comparison with those by other risk management experts.

Because of rapid economic growth in XXX over the past years has increased the fear of major business failure, risk has become an overwhelmingly dominant business topic. As a result, top managers are now focusing on risk management in their companies. As each business entity struggles with its own set of needs and circumstances, the need and flexibility to address this continuously changing and volatile economic environment, would be extremely challenging and fulfilling to me.

The ability to understand and quantify risk, is of the utmost importance. This is something that can be used to define the precise ways that risk should have the ability to be managed, and the precise way that risk should be dealt with on a macro level. It is important to understand that risk management is an excellent medium in which risk could be mitigated. This is an important variable that must be understood in this case, as there are many potential risk areas that the firm must deal with. By taking on a macro integrated approach, the ability to understand with and better deal with risk will continue to be present.

Recently, more and more organizations pay attention on risk governance because of the effect of global financial crisis and fast changing in globe. In addition, the numerous organizations’ failure also increases the weight of risk governance. Therefore, it is important to implement risk management accurately by the boards. However, many boards lack knowledge and experience to implement effective risk management that cannot achieve the primary board objective – risk oversight function. Based on International Risk Governance Council’s (IRGC) risk governance framework, risk governance is used as an analytic tool to assess and manage risk, which is benefit to implement risk management in order to achieve the expected risk oversight function.

Identify the potential risks which affect the company and manage these risks within its risk appetite;

In recent years, life has become a lot more complicated. Today firms are confronted with business risks that are

Managing risk is essential to an organization’s victory. Even the largest corporations cannot control the economic and competitive environment around them. Planning encourages the development of

One well accepted description of risk management is the following: risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, acting on and communicating risk issues. In order to apply risk management effectively, it is vital that a risk management culture be developed. The risk management culture supports the overall vision, mission and objectives of an organization. Limits and boundaries are established and communicated concerning what are acceptable risk practices and outcomes. Since risk management is directed at uncertainty related to future events and outcomes, it is

Risk is the chance that the actual return from an investment may differ from what is expected. (Hickman, K. A., Byrd, J. W., & McPherson, M. 2013) Risk management discipline has evolved and expanded over the years and has shifted the focus from financial risks to a broader perspective with strategic risks. (Bugalia, J., & Kallman, J. 2012) Risk management involves; organizing, planning, controlling, leading and allocating resources and make decision for the organization for a success path. To achieve this component in running of a business, measures have been devised to identify and analyzed the uncertainties associated. This paper discusses the techniques devised by Dr. James Kallman, in comparison to those of other risk management experts.

Integrating risk management (RM) and management control together has been considered as a significantly essential approach to bring about high quality of RM. This idea has been developed since the Committee of Sponsoring Organizations of the Treadway Commission (COSO) published integrated framework for internal control in 1992. Ten yeas later, Section 404 compliance, which is part of Sarbanses-Oxley Act, was enacted in 2002 for the purpose of reviewing and reporting on effectiveness of internal control. In 2004, COSO also released Enterprise Risk Management (ERM), which is a framework to realize establishment of internal control and compliance with Section 404.

This essay will explore three areas of risk management which have been criticised in recent years due to their earlier neglect. Following the description of the problem and the current status of risk management research in each given area, a brief conclusion is provided. The conclusions in this essay aim to address the issues in risk management more generally by building on the status of risk management studies.

In recent changes a few things have become important for companies. The first is connecting risk to business performance. Companies need to establish processes and mechanisms which link risk to business performance. Risk management under the present scenario also includes measures like sophisticated measurement, modeling and analytics for anticipating risks as well as integrating risk management capabilities with the organizational structure and across business units. Similarly, developing relationships with regulatory agencies as well as supervising regulation and compliance has also become important. (Butcher, 2011) Apart from all, detailed training on risk management and infusing risk awareness across the organization is also important. In short, integrating the risk function to include it in strategic planning has become crucial to gaining sustainable advantage.