Chapter 1 Flashcards
1
Q
ERM definition
A
ERM involves considering the risks of the enterprise as a whole, rather than considering individual risks in isolation. This allows for concentration of risk arising from a variety of sources within an enterprise to be appreciated, and for diversifying effects of risks to be allowed for.
2
Q
Why companies implement an ERM programme
A
Previous management failures Near miss Disaster in similar organisation Regulatory Stakeholder concern
3
Q
Benefits or ERM
A
Better reporting of risk Increased organisation effectiveness Improved business performance Align strategy with risk appetite identify and manage risks across entire organisation Minimise losses Price/manage/transfer risks better Efficiency of resources Link between business growth, corporate risk and return Allocate capital more efficiently React quicker
