What is ERM?
According to the definition of ERM from COSO, ERM is:
• A process, ongoing and flowing through a company;
• Every people at every level of an organization will affect ERM;
• ERM is applied in strategy setting;
• ERM is applied every level and unit across the company and consider the risk at entity level;
• Identify the potential risks which affect the company and manage these risks within its risk appetite;
• Has the ability to provide suitable assurance to the management and boards.
Why WP should implement an ERM process and what are the benefits to WP’s stakeholder?
Imply ERM in WP will provide the following benefits:
1. Unacceptable performance variability reduction: the profit provided by WP over last few years varies…show more content… 5. Ready for the changes of business environment: it is unavoidable that the business environment of WP will be changed in the future, for example, product more tastes of wines. ERM can help the management team to estimate the effectiveness of the existing strategies and the information and data available for decision making. ERM also can help the management team to simulate the future scenarios, predict the possibility and severity of the scenarios. The ability of handling changes provides Peace Family a more predictable future of the business. Moreover, a reliable and long life band will be a benefit to customers.
6. Align strategy and corporate culture: The WP management team will create better risk awareness by using ERM. Also, a positive and open culture with respect to risk and risk management will be created as well. This will make every people at every level in WP to participate into the risk management activity which will be a huge benefit to WP and its employees.
Who will be responsible for the ERM process?
The following will be responsible for the ERM process:
1. Chief Executive Officer (CEO): CEO is ultimately responsible for ERM priorities, strategies and polices. CEO also needs to ensure ERM implementation is strategy-setting.
2. The board of director. The board of director should discuss enterprise risk management with management and t oversight the implementation. They need to ensure that most of significant risks have been
