In today’s world of financial crises, regulatory changes, security breaches, and natural disasters, it’s a mistake to have minimal or no processes in place to identify and track emerging risks. Enterprise Risk Management (ERM) goes beyond traditional risk management practices. It is an integrated, company-wide process and control system that identifies and prioritizes critical financial, operational, strategic, compliance, and other risks facing the organization.
ERM can be an important strategic tool that helps management keep an eye on risks that might impact the company’s long-term strategic success. Because risks constantly emerge and evolve, it’s important to understand that ERM is an ongoing process. The benefits of ERM are only realized when management realizes that ERM is an active and living process, with ongoing updates and improvements.