What is Enterprise Risk Management (ERM)?Your organization is increasingly facing complex sets of risk. As a result, employees, board members, and the people you serve have increased scrutiny of your policies addressing risk management. Enterprise Risk Management (ERM) is a tool that can help you identify uncertainties and respond accordingly.
According to the Casualty Actuarial Society, Enterprise Risk Management, or ERM is “the process by which organization in all industries assess, control, exploit, finance, and monitor risks from all sources for the purpose of increasing the organization’s short and long term value to its stakeholders.”
ERM Framework is organized by Risk Type and goes through sequential steps within a risk management process. All ERM models identify Risk Types as Hazard, Financial, Operational, and Strategic. The framework grid follows a process of establishing context, identifying risks, analyze/quantifying risks, assess/prioritize, treat risks, monitor & reviewing.
Setting up an ERM risk committee can be a daunting task for smaller organizations however, every organization can benefit from the basic principals gleaned from an ERM program. ERM enhances your positioning by improving decision making, governance, and creating a broader culture of accountability and governance.