Enterprise Risk Management [ERM] has come a long way. Since the mid-1990s, ERM has emerged as a concept and as a management function within organisations.
Its emergence can be traced to two main causes. First, following a number of high-profile company failures and avertible large losses, the latitude of corporate governance has widened to clasp the risks that a company takes. Second, shareholder value modeis playing a greater role in
strategic development. Early strategic planning models paid inadequate attention to risk.
As business risks continue to surge, organizations are finding it essential to implement some sort of formal risk management system. An effective enterprise risk management (ERM) program can help organizations manage their risks and maximize opportunities.
Organisations in all types of industries, public and private, have observed a variety of benefits from enhancing their risk management agendas.
A committee of five organizations dedicated to thought leadership around risk management provided a definition of ERM in 2004. The Committee of Sponsoring Organisations (COSO) defined it as:
“… a process, effected by the entity’s board of directors,…
