Barclays ERM: Integrated Framework to Help Businesses
Introduction
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued Internal Control – Integrated Framework to help businesses and other entities assess and enhance their internal control systems. That framework has since been incorporated into policy, rule, and regulation, and used by thousands of enterprises to better control their activities in moving toward achievement of their established objectives.
Companies have recently increased their focus on risk management and it became clear that there an urgent need exists for a framework to effectively identify, assess and manage risk.
The need for an enterprise risk management framework, providing key principles and concepts, a common language, and clear direction and guidance, became even more compelling. COSO believes this Enterprise Risk Management – Integrated Framework fills this need, and expects it will become widely accepted by companies and other organizations and indeed all stakeholders and interested parties.
The framework is becoming more and more popular and being used by organizations of all calibers.
The methodology is based on the building-block approach. The building-block process enables organizations to evolve ERM as they establish a risk culture and offers better opportunities for efficient and effective allocation of resources for ERM activities.
The building block approach consists of: (1) implementing the ERM frame- work on a limited basis across each of the framework’s eight interrelated components, and (2) placing initial emphasis on entity-wide risks across all four risk categories—strategic, operations, reporting, and compliance. The ERM framework can be expanded, including an eventual cascading of the framework throughout other levels of the organization as senior management becomes comfortable with the culture the framework creates.
There exist several benefits which COSO ERM framework provides: size of a company plays no role at all – all
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued Internal Control – Integrated Framework to help businesses and other entities assess and enhance their internal control systems. That framework has since been incorporated into policy, rule, and regulation, and used by thousands of enterprises to better control their activities in moving toward achievement of their established objectives.
Companies have recently increased their focus on risk management and it became clear that there an urgent need exists for a framework to effectively identify, assess and manage risk.
The need for an enterprise risk management framework, providing key principles and concepts, a common language, and clear direction and guidance, became even more compelling. COSO believes this Enterprise Risk Management – Integrated Framework fills this need, and expects it will become widely accepted by companies and other organizations and indeed all stakeholders and interested parties.
The framework is becoming more and more popular and being used by organizations of all calibers.
The methodology is based on the building-block approach. The building-block process enables organizations to evolve ERM as they establish a risk culture and offers better opportunities for efficient and effective allocation of resources for ERM activities.
The building block approach consists of: (1) implementing the ERM frame- work on a limited basis across each of the framework’s eight interrelated components, and (2) placing initial emphasis on entity-wide risks across all four risk categories—strategic, operations, reporting, and compliance. The ERM framework can be expanded, including an eventual cascading of the framework throughout other levels of the organization as senior management becomes comfortable with the culture the framework creates.
There exist several benefits which COSO ERM framework provides: size of a company plays no role at all – all