Enterprise Risk Management Framework
Benefits of Enterprise Risk Management
Enterprise risk management (ERM) is an effective way to manage risk across an organization with a common and robust risk management framework. The framework may vary considerably depending on the organization, but usually involves people, tools and rules. These are some of the benefits of ERM implementation.
Organizations that implement ERM notice that more focus on risk, especially at the higher level, leads to more frequent discussion of risk and risk-related issues at all levels within the organization. This often results in a cultural shift that allows organizations to consider risk more openly and helps breaks down silos with regards to the way risk is managed.
Enterprise risk management supports better reporting, structure and analysis of various risks. Standardized and timely reports that keep track of different enterprise risks can improve the focus of executives and directors by the increased visibility of valuable data that can lead to better risk mitigation decisions.
ERM can develop key indicators to detect any potential risk events and provide timely warnings. Key measurements and metrics of various risks further improve the value of analysis and reporting and enhance an organization’s ability to track any potential changes in risk likelihood or consequences.
Organizations operating without enterprise risk management tend to have several individuals who are involved in the management and reporting of risk across various operational units. Although the development of an ERM program will not necessarily replace the requirement of daily risk management, it definitely improves the tools and framework needed to perform several crucial risk management functions consistently. The elimination of different redundant processes can improve operational efficiency through the allocation of an appropriate amount of resources needed to mitigate the risks.
For more information about risk management framework or Risk Management Services call 757-637-0440 or you may contact here.
