Open-access content
Friday 16th December 2011
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updated 5.50pm, Wednesday 29th April 2020
Risk management
Enterprise risk management
Enterprise risk management (ERM) is generally accepted to be a wider subject than traditional risk management.
While traditional risk management focuses on identifying, measuring and monitoring risks to limit a company's losses, ERM recognises that businesses take risks to make a profit for their owners. It therefore attempts to strike a balance between too much risk and not enough risk in light of a business's strategy - making sure the risk-taking activities of the company are aligned with its objectives and its willingness, or otherwise, to take losses.
An ERM process will incorporate risk information into strategic planning, management decision making, product design and more.
