Enterprise Risk Management outline

Enterprise risk management (ERM) is the process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effects of risk on an organization’s capital and earnings. Enterprise risk management expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks.

In order to understand how enterprise risk management functions, one must understand the fundamentals of risk and the distinctions (or similarities) of traditional risk management. The slideshows “What is Risk” and “Traditional Risk Management” covers these basics.

Because each company may have various systems in place to manage all risks, it’s important to know how a business will have a strategic discipline that supports the achievement of an organization’s objectives by addressing all exposure to risk, including financial. Slideshow “Enterprise Risk Management” will show a basic outline of what distinguishes this from traditional risk management. Investment risks have a probability that an actual return on an investment will be lower than the investor’s expectations. All investments have some level of risk associated due to the unpredictability of the market’s direction. Since financial risks are crucial to any enterprise risk management program, “Types of Investment Risks” lists some of these specific risk categories.

Lastly, in recent years, external factors have fueled a heightened interest by organizations in enterprise risk management. Industry and government regulatory bodies, as well as investors, have begun to scrutinize companies’ risk-management policies and procedures. “How Companies Can Mismanage Risk” examines some these mistakes, even when an organization has a risk management program