Enterprise risk management Literature review Example | Topics and Well Written Essays - 3000 words

Enterprise risk management - Literature review instanceERM involves taking a proactive view of the entire stage business or organisation rather than facial expression at risk as simply a matter of redundant project overview to identify threats. It goes further beyond the emblematic SWOT analysis that looks at different weaknesses and threats and recognises the whole of the business as a functional unit that is inter-connected whereby multitudes of risk possibilities exist. This literature review describes what constitutes enterprise risk management, its major components and also pull up stakess an recognition of how an ERM create mentally can be designed into virtually any(prenominal) industry. 2. Defining a stable ERM programme Enterprise risk management is defined as The discipline by which an organisation in any industry assesses, controls, exploits, finances, and monitors risks from all sources for the purpose of increasing the organisations short- and long-term value to its stakeholders (casact.org, 2003, p.8). What makes ERM different from typical risk management programmes is that it recognises strategic imperatives, thus making it an ongoing part of strategic analysis oft dictated by executive leadership and Board governance. Generally, risk management programmes are short-term objectives associated with special project teams, thereby somewhat ignoring the long-term prospects of risk mitigation in multiple areas of the business. Kimmel & Anderson (2010) identify fiver specific elements of an ERM system to include 1. Linking risk management to the organisations strategy, values and culture This comment insists that enterprise risk management is linked to the operational and human capital components of the organisation and is tied at a time to organisational structure and design. 2. Providing management with a comprehensive and repeatable knowledge base so as to empathise how to identify and assess potential risk factors. 3. Assignment of s pecific roles and responsibilities tied to governance for ERM. 4. The ability to provide higher valued knowledge so that managers can make better operational and financial business decisions. 5. Providing risk-related knowledge so that auditing and monitoring is an ongoing part of the programme design. Most organisations that utilise ERM systems recognise intravenous feeding categories of objectives in order to assist organisations in meeting long- and short-term strategic goals. These include, as offered by Moore (2010) 1. strategical imperatives These are high-level goals that help align the organisation to its overall mission and value proposition. 2. Operational components assist to achieve efficient and effective use of resources organisation-wide, such as marketing, production and accounting (as relevant examples). 3. account Reporting aspects include financial figures and overall business strengths as related to stakeholders and shareholders. 4. Compliance Laws and re gulatory accordance such as Sarbanes Oxley and other labour-related laws that drive business structure and operations. These four objectives are part of the COSO sit down that is widely used in most organisations that have developed an ERM system, one of the most common models of ERM available. It is a comprehensive tool for identifying and managing risk factors (Moore, 2010). Enterprise risk management is beneficial to the business as it creates a teamwork