Nowadays, we are all affected by the volatile and complex world, and with the threat of recession and economic uncertainty, the ongoing effects of the pandemic, and now the conflict in Ukraine, developing and implementing integrated enterprise risk management strategies is more important than ever for the survival of many organisations.
Managers must devise and implement suitable solutions for the high levels of exposure to risks due to the economic, financial, and social effects the present economic framework is having on the global economy, particularly in Europe. Organizations with such a management solution in place may be able to create more efficient mitigation plans, enabling them to get through the current turbulence faster and with less value lost.
But what exactly is Enterprise Risk Management?
Enterprise Risk Management (ERM) is a top-down strategy that looks at risk management from a holistic approach, looking at the organization as a whole. Thus, instead of each business unit being responsible for its own risk management, firm-wide surveillance is given precedence. This methodology aims to identify, assess, and prepare companies for potential losses, dangers, hazards, and other threats that may impact the well-functioning of the firm and its ability to reach their goals. And it is not only looking at financial risks, but also at operational, market, technological, and macroeconomic risks.
To implement this strategy, organisations must not only determine which risks they face, but also evaluate their expected effects and develop action plans that are integrated into the various parts of their business plans, such as their annual and long-term budgets.
How to implement Enterprise Risk Management?
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