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ERM provides a framework for risk management which typically involves identifying particular events or circumstances relevant to the organization's objectives (risks and opportunities), assessing them in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring progress.

 

By identifying and proactively addressing risks and opportunities, business enterprises protect and create value for their stakeholders, including owners, employees, customers, regulators, and society overall. 

 

ERM can make a company’s financial framework much more solid by protecting its capital base by monitoring risk within its appetite and tolerance; enhancing value and risk/return profile via more efficient capital deployment; making decision-making more consistent and reliable; and instilling a culture of awareness and discipline.