Enterprise Risk Management Flashcards
Mission
Why the company exists & what it hopes to accomplish
Vision
What it hopes to achieve over time
Core Values
How to achieve goals - Ethics, Culture, What is good or bad
Value Creation
The successful & profitable launch of a new product line by an entity
Value Preservation
A company’s ability to maintain market share with high customer satisfaction & Sustained profitability
Value Erosion
The unsuccessful launch of a new product
Governance & Culture
D.O.V.E.S
Desired Culture
Oversight of the Board
Values
Attracts capable Employees
Establishes Operating Structure
Strategy & Objective
S.O.A.R
Strategies
Formulates Business Objectives
Analyzes Business Context
Risk Appetite
Performance
V.A.P.I.R
Views
Assesses Risk Severity
Prioritize Risk
Identifies Risk
Implements Risk Responses
Review & Revision
S.I.R
Accesses Substantial Change
Pursues Improvement in ERM
Reviews risk & Performance
Information, Communication & Reporting (OnGoing)
T.I.P
Leverages Information & Technology
Communicates Risk Information
Reports on Risk, Culture & Performance
Board of Directors
Responsible for oversight of Management by assessing work & holding them accountable
Management
Responsible for developing & implementing the ERM framework and process
4 Methods of Responding to Risk
Avoidance: Discontinuing, Replacing
Reduction: Relocating, Diversifying
Sharing: Purchasing Insurance
Acceptance: Doing nothing
Inherit Risk
Risk to an entity in the absence of any direct of focused action by management to alter its severity
