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Five steps to Enterprise Risk Management
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Introduction
With the changing business environment brought on
by events such as the global financial crisis, gone are
the days of focussing only on operational and tactical
risk management. Enterprise Risk Management
(ERM), a framework for a business to assess its overall
exposure to risk (both threats and opportunities), and
hence its ability to make timely and well informed
decisions, is now the norm.
Ratings agencies, such as Standard & Poors, are reinforcing this
shift towards ERM by rating the effectiveness of a company’s
ERM strategy as part of their overall credit assessment. This
means that, aside from being best practice, not having an
efficient ERM strategy in place will have a detrimental effect
on a company’s credit rating.
Not only do large companies need to respond to this new
focus, but also the public sector needs to demonstrate
efficiency going forward, by ensuring ERM is embedded not
only vertically but also horizontally across their organisations.
This whitepaper provides help, in the form of five basic steps
to implementing a simple and effective ERM solution.
This is first of a series of whitepapers on Enterprise Risk
Management. Future papers will expand on each of the steps in this
whitepaper as well as continuing to cover Governance and
Compliance.