Embrace enterprise risk management approach to add value, keep up with changing times

2018 ◽  
Vol 18 (11) ◽  
pp. 1-3
Author(s):  
Claudine McCarthy
Keyword(s):  
Risk Management ◽  
Enterprise Risk Management ◽  
Management Approach ◽  
Enterprise Risk ◽  
Changing Times

scholarly journals Creating Value Through Enterprise Risk Management

2011 ◽  
Vol 25 (3) ◽  
Author(s):  
Frantz Maurer
Keyword(s):  
Risk Management ◽  
Financial Markets ◽  
Enterprise Risk Management ◽  
Strategic Decision ◽  
Management Systems ◽  
Management Approach ◽  
Financial Risks ◽  
Fully Integrated ◽  
Enterprise Risk ◽  
Integrated Risk

The traditional risk management approach has been characterized as a highly disaggregated method of managing financial risks. Recently, risk management has evolved from a narrow, insurance based view to a holistic; all risk encompassing view, commonly termed Enterprise Risk Management (ERM). Financial risks are inherent in financial markets and their management represents one of the main tasks in the business of financial institutions. Enterprise Risk Management enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. In contrast to the existing finance literature, this paper emphasizes the practical issues related to the adoption of an ERM framework for strategic decision-making in banks. The aim is to provide an extensive guide to the implementation issues faced by banks that are in the process of implementing fully integrated risk management systems and capabilities.

Why do firms adopt enterprise risk management (ERM)? Empirical evidence from France

2016 ◽  
Vol 54 (8) ◽  
pp. 1886-1907 ◽  
Author(s):  
Majid Jamal Khan ◽  
Dildar Hussain ◽  
Waqar Mehmood
Keyword(s):  
Risk Management ◽  
Empirical Evidence ◽  
Survival Data ◽  
Proportional Hazards Model ◽  
Enterprise Risk Management ◽  
Cox Proportional Hazards Model ◽  
Annual Reports ◽  
Management Approach ◽  
Content Type ◽  
Enterprise Risk

Purpose Enterprise risk management (ERM) is a risk management approach that calls for integrating all the organization-wide risks and takes a portfolio view point of managing organizational risks. The purpose of this paper is to investigate the factor that influence a firm’s decision to adopt ERM. Design/methodology/approach The authors employ a particular technique of survival data analysis, the Cox proportional hazards model, to investigate the factors that lead towards the decision of initiating an ERM programme. The authors constructed a unique sample of French firms derived from the information in 315 corporate news announcements for the hiring of a chief risk officer and information retrieved from publicly available annual reports to identify firms that initiated an ERM programme, over the period from year 1999 to 2008. Findings The results suggest that besides the growing international and local regulatory pressure, factors that are internal to the organizations like the expected probability of financial distress and its explicit and implicit costs, poor earnings performance and the existence of growth opportunities play vital role in motivating firms to adopt ERM. It was also found that corporate governance practices such as the independence of the board may also lead towards an initiation of the ERM. Originality/value This study makes theoretical and methodological contribution the ERM literature by employing a novel methodology and presenting empirical evidence based on data form French firms.

scholarly journals Enterprise Risk Management – Approaches Determining Its Application and Relation to Business Performance

2020 ◽  
Vol 24 (2) ◽  
pp. 51
Author(s):  
Jozef Klučka ◽  
Rudolf Grünbichler
Keyword(s):  
Risk Management ◽  
Performance Management ◽  
Business Performance ◽  
Enterprise Risk Management ◽  
Management Approach ◽  
Probability Of Error ◽  
Enterprise Risk ◽  
Business Performance Management ◽  
Management Approaches ◽  
The Impact

<p><strong>Purpose:</strong> As management systems, enterprise risk management and enterprise performance management pursue similar objectives and influence each other positively. The paper aims to provide an insight into the relationship between Enterprise Risk Management and Business Performance Management.</p><p><strong>Methodology/Approach:</strong> The paper compares the results of an American study with the results of a Slovakian study. First, the American results are cited and interpreted. Then the Slovak results are presented and discussed. Then the results are compared. In the last part an overall conclusion is drawn, the relationships between the results are shown and practical implications are explained.</p><p><strong>Findings:</strong> The results show similarities, but also differences to Enterprise Risk Management and the relationships between Enterprise Risk Management and Business Performance Management. The paper shows that there are differences in both the management approach and the impact on business performance between American and Slovak companies.</p><p><strong>Research Limitation/implication:</strong> A limitation in both studies is the limited number of participating companies. This is accompanied by a higher probability of error.</p><strong>Originality/Value of paper:</strong> The paper provides new information to the gap related to subjects enterprise risk management and business performance management and their relations.

scholarly journals Operational Risk Analysis Based on Enterprise Risk Management Approach (ERM) in Export Document Service Company (Case Study at CV Tarukalpa Dewata)

2021 ◽  
Vol 4 (2) ◽  
pp. 127-136
Author(s):  
Ni Luh Gede Intan Diana Wahyuni ◽  
◽  
I Made Sudana ◽  
P Dyah Hudiananingsih ◽  
◽  
...  
Keyword(s):  
Risk Management ◽  
Enterprise Risk Management ◽  
Management Approach ◽  
Operational Risks ◽  
Enterprise Risk ◽  
Impact Risk ◽  
Qualitative Descriptive ◽  
Operational Activities ◽  
Technological Constraints ◽  
The Impact

Every company in carrying out its operational activities will definitely face a risk. The various possible risks that can be experienced by the company in carrying out its operational activities need to be managed and controlled by carried out risk management. The implementation of risk management is expected to assist companies in identified, analyzed, assessed, and controlled risks and the impact of risks. One approach that can be used to perform risk management is Enterprise Risk Management (ERM). This research aims to analyze operational risks that occurred at CV Tarukalpa Dewata based on an Enterprise Risk Management (ERM) approach by identified risks, risk assessments, efforts to respond the risks and carry out risk controls to find out what actions must be taken to minimize the possibility of risks and impact risk. This research used a qualitative descriptive research method by collecting data through interviews, observations and questionnaires. The results showed that in the operational activities of CV Tarukalpa Dewata there were seventeen possible risks consisting of four risks originating from human resources owned by the company, five risks that occurred in the process of making export documents, two risks that occurred due to technological constraints, and six external risks. The results of the risk assessment showed that there were three levels of risk that occurred in the operational activities of CV Tarukalpa Dewata namely moderate, low, and very low. Responses to existing risks are carried out by monitoring, controlling management, and paying special attention (urgent) in the company's operational activities.

FROM SILO APPROACH TO RISK PORTFOLIO MANAGEMENT – A NEW WAY OF ANALYZING RISK IN AN ENTERPRISE

2018 ◽  
Vol 19 (3) ◽  
pp. 251-262
Author(s):  
Sylwia Przetacznik
Keyword(s):  
Risk Management ◽  
Portfolio Management ◽  
Holistic Approach ◽  
Enterprise Risk Management ◽  
Management Approach ◽  
Current State ◽  
Enterprise Risk ◽  
Management Concept ◽  
Management Approaches ◽  
Stock Portfolio

The paper presents the concept of risk portfolio management – a holistic approach to risk analysis. It summarizes current state of knowledge regarding examined topic. Assessment of the suitability of portfolio management approach in the enterprise risk management was based on review of the subject literature. The author makes an attempt to confirm the hypothesis of risk portfolio management being a necessary and key part of proper enterprise risk management. The first section of the article provides a brief overview of the evolution of risk management. In the succeeding sections, descriptions of two latest risk management approaches: the traditional, silo risk management and the Enterprise Risk Management (ERM) approach are followed by a presentation of the risk portfolio management concept, which is compared to stock portfolio management. The paper focuses on the kinds of dependencies between certain risks which should be particularly considered and the ways in which portfolio analysis can be used to enhance a company’s understanding of its risks and enable it to make better management decisions. The last section of this paper presents potential effects of the implementation of the portfolio approach, focusing on benefits of portfolio management in a company’s activities.

scholarly journals Enterprise Risk Management and Its Effect on Firm Value in Turkey

2016 ◽  
Vol 8 (4) ◽  
pp. 86 ◽  
Author(s):  
Özlem SAYILIR ◽  
Muhammad FARHAN
Keyword(s):  
Risk Management ◽  
Business Strategy ◽  
Firm Value ◽  
Manufacturing Industry ◽  
Enterprise Risk Management ◽  
Management Approach ◽  
Risk Monitoring ◽  
Enterprise Risk ◽  
Integrated Risk ◽  
The Impact

Enterprise Risk Management (ERM)is an integrated risk management approach, which considers risks in the context of business strategy and manages them with a portfolio perspective through well defined risk responsibilities and strong risk monitoring processes. The purpose of this study is to examine the impact of ERM on firm value for 130 firms operating in the manufacturing industry and listed in Borsa Istanbul. For this purpose, we utilized panel regression models on financial data collected in the period 2008-2013. The dependent variable is Tobin’s Q, which is used as a proxy of firm value. The independent variable is ERM implementation, whereas the control variables are firm size, leverage ratios and profitability ratios. We tested the hypothesis that there is a relationship between ERM and firm value. Our findings suggest that there seems to be no statistically significant relationship between firm value and ERM. We also employed a survey to explore how firms implement ERM and to obtain information about motivation behind adoption of ERM, challenges of ERM implementation and effects of ERM adoption.

scholarly journals The Factors Influencing the Enterprise Risk Management Practices and Firm Performance in Jordan and Malaysia

2020 ◽  
Vol 8 (5) ◽  
pp. 687-702
Keyword(s):  
Risk Management ◽  
Firm Performance ◽  
Middle East ◽  
Influencing Factors ◽  
Management Practices ◽  
Enterprise Risk Management ◽  
Management Approach ◽  
Factors Influencing ◽  
Enterprise Risk ◽  
Comparative Review

Future of uncertainty and risks in firm businesses and country-based economics remains continuous processes that need to be managed effectively and efficiently. Risks taking is a routine activity in all firms. Enterprise Risk Management (ERM) has now become an ultimate concern and a robust risk management approach in all financial and non-financial industries and other sectors throughout the globe. Firms are adopting ERM as a holistic strategy by putting its core components in practice to effectively manage all risks to protect the organizations and stakeholder value. The process of putting ERM into practice is only effective and efficient through identifying the factors that influence its practice in order to improve the firm performance. As a result of this reason, various factors influencing ERM were examined by different investigators as an indirect factor or as a parameter. However, only a few scholars studied it as a major factor or main objective, despite the risks remain a major issue influencing the goals of enterprises in all firm types in both Jordan and Malaysia. In order to fully consolidate the influencing factors on ERM practices, a comparative review of the available literature in Jordan and Malaysia were carried out to excavate the key influencing factors for direct identification in order to improve the firm performance. The factors identified were categorized into three groups; the management-based, firm-based, and ERMperformance-measurement-based factors. Each group of factors was found to influence the success of ERM strategies and practices in both Jordan and Malaysia. Jordan (Middle-East) and Malaysia (South-East Asia) shared a common characteristic of ERM adoptions and practices with regard to firm composition and risk management. Both countries are now pacing up to meet up with ERM practice challenges. Although, ERM still is a relatively new concept in several parts of Middle-East and SouthEast Asia. Though, Malaysia proved to have more improved and established ERM success factors and researches as compared to Jordan. Additionally, Malaysia was found to have more appeared ERM terms in the Board of Bursa Malaysia (BBM) Guidelines as well as ERM practices under different sectors from 2008 to 2018 compared to Jordanian Amman Stock Exchange (ASE). Thus, it appears that Malaysia has more robust ERM research works, adoptions, practices, and compliance system in place compared to what is obtainable in Jordan. In conclusion, firm managers in Jordan and Malaysia are highly recommended to use these ERM factors identified as strategic and to improve ERM practices in their organizations

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