Page 74 - RISK Management IC86 Ebook

Risk Management

assesses, controls, exploits, finances and monitors risk from
all sources for the purposes of increasing the organization's
short- and long-term value to its stakeholders."

Similarly, coso defines ERM as:

n "... a process, affected by an entity's board of directors,
management and other personnel, applied in a strategy setting
and across the enterprise, designed to identify potential events
that may affect the entity, and manage risk to be within its
risk appetite, to provide reasonable assurance regarding the
achievement of entity goals"

Comparison of the two definitions -:
l ERM is an organized, systematic way of managing risks

throughout the organization and not a once-and-done
activity, but an ongoing process.
l Both definitions speak of ERM as applying broadly both
in terms of the risks it encompasses and to the
organizations to which it applies.
l ERM applies broadly to all organizations.
l ERM practitioners may find they have more in common
with those from fields far removed from insurance or
financial services.

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