Enterprise Risk Management

ERM (Enterprise risk management) is designed to identify potential events that, if they occur, will affect the entity and to manage risk within its risk appetite. It is well entrenched and its implementation is spreading. It provides a proven framework within corporate governance for risk management. The concept of Enterprise Risk Management has been around for over 25 years, it is formalized largely as a result of initiatives of the COSO (Committee of sponsoring organizations). This chapter discusses enterprise risk management that is effected by an entity-s board of directors, management and other personnel that applied in strategy setting and across the enterprise, designed to identify events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.