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COSO ERM - Committee Sponsoring Organisations of the Treadway Commission…

- - - - Events with a negative impact represent risks which can prevent value creation or erode existing value. Events with positive impact may offset negative impacts or represent opportunities. opportunities are the possibility that an event will occur and positively affect the achievement of objective, supporting value creation or preservation. management channels opportunities back to its strategy or objective-setting processes, formulating plans to seize the opportunities.
- - - - encompasses the tone of an organisation, and sets the basis for how risk is viewed and addressed by an entity's people, including risk management philosophy, risk appetite, integrity, ethical values and the environment in which they operate.
    - - Objectives must exist before management can identify potential events affecting their achievement.
    - - Internal and external events affecting the achievement of an entity's objectives must be identified, distinguishing between risks and opportunities.
    - - Risks are analysed, considering likelihood and impact. Risks are assessed on an inherent and residual basis.
    - - Management selects risk responses - avoiding, accepting, reducing or sharing risk - developing a set of actions to align risks with the entity's risk tolerances and appetite
    - - Policies and procedures are established and implemented to help ensure that the risk responses are affectively carried out.
    - - Relevant information is identified, captured and communicated in a form and timeframe that enable people to carry out their responsibilities. Effective communication flows down, across and up the entity.
    - - The totality of ERM is monitored and modified as necessary. Monitoring is accomplished through ongoing management activities, separate evaluations, or both.