The Need for ERM Becomes More Evident

In this month's issue of the Journal of Accountancy, Enterprise Risk Management ("ERM") is profiled as a management discipline that has much room for improvement in many companies today.  The authors of the article note that few companies have adopted a true ERM approach and a large number of companies have yet to see the value of implementing an ERM program.  However, with the complexity and interconnection of risks increasing, many senior executives and board members are realizing the need for a solid ERM program in their company.  Here is what the authors have to say.

Much of the shift in thinking about risk oversight has centered on ever-growing calls for boards and senior executives to embrace the business paradigm widely known as enterprise risk management (ERM). ERM is championed as an effective approach to identifying, assessing and monitoring risks across organizations and establishing communication protocols to efficiently share this risk information quickly across the entity. The ERM approach emphasizes a top-down, holistic view of the inventory of key risk exposures potentially affecting an enterprise’s ability to achieve its objectives. Proponents argue that a comprehensive ERM process helps to ensure that significant risks are given adequate consideration by senior management and boards of directors in the strategic planning process. Boards and senior executives use this inventory of risks with the goal of preserving and enhancing stakeholder value.

Is your company contemplating an ERM implementation?  If so, Wheelhouse Advisors can help. To learn more, visit www.WheelhouseAdvisors.com.