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INTRODUCTION TO ERM, image - Coggle Diagram
INTRODUCTION TO ERM
WHY ERM is important?
Many corporate activities linked to uncertainties of future developments --> new threats or opportunities
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The Actual "WHY"
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Comprehensive view of all risk, opportunities, and their respective interdependencies
Benefit
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Lessened dynamics in stock price, which also improves shareholder’s value;
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Enhanced competitive advantage through the identification of significant risks that can be actively managed.
Definition of ERM
COSO (2017): The culture, capabilities, and practices, integrated with strategy-setting and its execution that organizations rely on to manage risk in creating, preserving, and realizing value.
ISO 31000 (2018): …coordinated activities to direct and control an organization with regard to risk.
The Risk Management Society (RIMS, 2017): …a strategic business discipline that supports the achievement of an organization’s objectives by addressing the full spectrum of its risks and managing the combined impact of those risks as an interrelated risk portfolio.
Best suited: ERM embraces enterprise-wide coordinated activities by which companies identify, assess, manage, and report all key risks to create value for the firm.
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ERM Framework
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What is the relationship between this textbook and the COSO ERM/ISO 31,000 frameworks? Not reflect all relevant topics, sometimes referenced
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