Enterprise Risk Management

Abstract

ERM is a relatively new management technique and differs across companies and industries. It incorporates adequate financial internal controls as one of its essential components. The main objective of ERM is to enhance value of the firm by developing a coordinated and integrated approach to deal with risks across the entire business. One of the biggest challenges on the ERM journey is designing an appropriate model. It is important to point out that ERM models are still evolving and require time and experience to build the most appropriate one. In response to a need for principle-based guidance to help entities design and implement effective enterprise-wide approaches to risk management, COSCO issued the Enterprise Risk Management - An Integrated Framework in 2004. This framework defines essential enterprise risk-management components, discusses key ERM principles and concepts, suggests a common ERM language, and provides clear direction and guidance for ERM.