Enterprise Risk Management (ERM) or comprehensive risk management is an emerging management discipline taken by organisations to integrate their management of a range of risks by explicitly addressing risk management at strategic, tactical and operational levels.
The assumption of risk and the handling of risks are an inseparable part of business within the public or private sectors, where the effective and efficient management of risk is a core competency of the organisation.
Optimal risk management is a strategically decisive factor in business and is critical to the future success of business and the public sector, in doing more with less funding and scarce resources.
Spectacular cases of losses, fraud and mismanagement have caused regulatory authorities world wide, to increase the demands they place on risk management.
Risk management in essence means the establishment of an organisational framework for handling risks. All the processes, structures, resources and responsibilities needed to assure a systematic and efficient risk management process, is to be defined and anchored in this framework.
It further provides an organisational wide, co-ordinated framework for diverse risk management activities that have been traditionally separated by functional silos and outdated business models.