Real-world ERM (enterprise risk management)

Citation

Baker, N. (2009), "Real-world ERM (enterprise risk management)", Strategic Direction, Vol. 25 No. 5. https://doi.org/10.1108/sd.2009.05625ead.006

Real-world ERM (enterprise risk management)

Article Type: Abstracts From: Strategic Direction, Volume 25, Issue 5

Baker N.Internal Auditor, December 2008, Vol. 65 No. 6, Start page: 32, No. of pages: 6

Purpose – Discusses enterprise risk management (ERM). Design/methodology/approach – Recognizes that ERM often fails to deliver expected benefits and discusses how to make it work in practice, stressing the need to get everyone in the organization (including top executives) on board. Asserts that communications with most of them will be clearer if jargon is dropped and a common risk language developed. Urges companies to ensure that a key senior leader owns the project, that managers are accountable for ERM along with other business objectives and that existing risk management processes are used as a basis. Lists some ideas for internal audit involvement without crossing the boundaries of management responsibility. pointing out that the internal audit function is more likely to have enthusiasm for ERM and the focus needed to keep it alive. Refers to highly critical reports on the recent failures of risk management in banks, their “inappropriate” remuneration schemes, lack of management understanding of complex financial products etc. and hopes that the resulting crisis will encourage other sectors to take ERM more seriously. Originality/value – Talks to experienced individuals about the reality of ERM.ISSN: 0020-5745Reference: 38AC869

Keywords: Corporate strategy, Internal audit, Management accountability, Risk management