Enterprise risk management
Enterprise risk management integrates consideration of risk across an organisation and with its strategy, objectives and performance. It looks beyond isolated departmental risk lists to interactions, cumulative exposure, culture, governance and decisions about creating and protecting value. Frameworks can support this approach, but adopting their terminology does not itself establish effective management. Board oversight, management ownership, usable information and continuing review are important.
Worked example
Sales plans expansion while procurement reduces supplier diversity and finance limits cash reserves. An enterprise-wide review shows that the combined decisions create a greater continuity exposure than any department’s separate assessment suggests.
Common mistake
ERM is not simply a heat map or an exercise in adding departmental risk scores. Consider dependencies and the organisation’s strategic choices.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Direct | September 2026–June 2027 |