Enterprise Risk Management: A Strategic Business Discipline

1.0 INTRODUCTION

Enterprise Risk Management (“ERM”) is a strategic business discipline that supports the achievement of an organization 's objectives by addressing the full spectrum of its risks and managing the combined impact of those risks as an interrelated risk portfolio. The term ‘emerging markets’ is generally used to describe the group of low-to-middle-income countries pursuing substantial political and economic reform and a more complete integration into the global economy. There is no precise accepted definition, although the search for one can make for useful and thought-provoking reading. The following characteristics are commonly associated with these markets:

• Low-to-middle-income on World Bank income per head benchmark

Every organization faces uncertainty and the challenge constituted for the management is to define how much uncertainty to accept during its endeavors to increase the owner’s value. Uncertainty means risk and opportunity, which includes the possibility of the destruction or increase of value. Enterprise risk management allows the management to effectively manage uncertainty, the risk and possibility that comes with it, thus increase the ability to create

While with ERM, it does not replace the need for day to day risk management reporting. They can improve the framework and tools used to perform the critical risk management functions in a consistent manner.

3.5 Effective coordination of regulatory and compliance matters

Bond rating agencies, financial statement auditors, and regulatory examiners, have begun to inquire about, test, and use monitoring and reporting data from ERM programs. Since ERM data involves identifying and monitoring controls and mitigation efforts across the organization, this information can help reduce the effort and cost of such audits and reviews.

3.6 Other Benefits

• Growth - Growth and the market potential of the country itself. This is a reflection of the sheer scale and growing economic power of these economies.

• Risk priorities differ by location- Developed countries companies place a significantly greater emphasis on political, operational and supply chain risk. Emerging market companies, in turn, are significantly more likely to focus on market and competitive risk, currency, workforce, pricing and tax