Increasingly, boards of directors and senior executive teams are exploring the concept of enterprise risk management (ERM) to better connect their risk oversight practices with the execution of their strategic plan. ERM has become an important emerging business discipline that has attracted the attention of regulators, financial markets, and rating agencies as they examine firms within their areas of responsibility and interest. The recent financial crisis, emerging political unrest in nations around the globe, and the impact of significant natural disasters are placing even more emphasis on the importance of robust and strategic risk management practices in organisations of all types and sizes.
In spite of this increased focus on ERM, organisations still find it difficult to understand how ERM differs from traditional risk management, and what an effective ERM process looks like.
How Tool is Organised:
In each of the eight focus areas, the tool includes brief descriptors of key elements of an ERM process that are important to the strength of that focus area. The evaluator considers whether each of the key elements is currently present at the organisation at the time of the evaluation.
Percentage scores for each of the eight focus areas will help provide the organisation some direction about specific aspects of ERM that may require the most immediate attention.