ERM COSO DEFINITION
ERM COSO DEFINITION
This piece is a follow-up to yesterday’s write-up on the implication of ERM definition by COSO.
Please note that your comments and feedback are appreciated, and it shows that our objective of cascading risk management knowledge is achieving the desired results.
Enjoy the piece.........
ERM is therefore:
- Applied in strategy-setting
Implication- Any organization that is proactive, rather than reactive, must involve ERM ab-initio, in its strategy setting. It is observed that many organizations, especially banks, have appointed Executive Director, ERM. This was not the situation over a decade ago, when an Assistant Manager could head the Risk Management Department. This is a confirmation that ERM is currently being taken to a strategic level.
- Applied across the enterprise, at every level and unit, and includes taking an entity-level portfolio view of risk
Implication- if every unit/dept takes stock of the risks incurred at each micro-level, and takes the necessary steps to manage such risks, the risk management at the entity level would have been greatly enhanced and the coordination of risk at the central would be easier.
- Designed to identify potential events affecting the entity and manage risk within its risk appetite
Implication – All potential value destroyers would be identified and proactively dealt with by using ERM principles and techniques.
- Able to provide reasonable assurance to an entity’s management and board
Implication - ERM is about establishing the oversight, control and discipline to drive continuous improvement of an entity’s risk management capabilities in a changing operating environment.
For an organization to justify that it is applying ERM, all the above concepts embodied in COSO’s definition must be embraced.
Has your organization embraced the concepts, think on these things........
For you to continue to partake in these regular risk alerts, kindly join the Association (by registering and paying the appropriate fee) and be a certified Enterprise Risk Management Professional.
For further enquiries, contact
The Director General / Chief Executive
Association of Enterprise Risk Management Professionals
Tel 07062206653, 08033468451, 07088905252
Andi (on 2016-09-24 13:48:29 said)
providian insurance company