User:ShaynaG/sandbox

ENTERPRISE RISK MANAGEMENT
Enterprise Risk Management, ERM, is a fairly new process of managing risk within a company. Although ERM has yet to be widely accepted as an industry standard since there are various definitions as to what ERM exactly is, more recognition and acceptance of ERM has been shown. There are seminars dedicated to ERM explaining the process and providing examples of applications while also discussing advances in the field. Papers on ERM are also beginning to appear in journals and books which are starting to be published. Some universities are even starting to offer courses regarding ERM and the process.

DEFINTIONS OF ERM
A definition provided by the committee of Sponsoring Organization of the Treadway Commission (COSO) in 2004 defines ERM as a process, effected by an entity’s board of directors, management, and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be with its appetite, to provide reasonable assurance regarding the achievement of entity objectives.

Another definition provided by the International Organization of Standardization (ISO 3100) defines ERM as coordinated activities to direct and control an organization with regard to risk.

According to James Lam, the definition of ERM is a value added function can be described as the inclusive and cohesive framework for managing key risks in order to achieve business goals, mitigate unexpected earnings unpredictability, and increase firm value to reduce risk which is a variable that can cause deviation from an expected outcome.