Board Evaluation of Enterprise Risk Management Effectiveness
In brief: Adopted by many companies in the aftermath of the financial crisis, ERM offers a comprehensive framework for risk management, providing methods and processes to proactively manage risks. ERM can help boards and management teams create a single, top-down view of critical risks that might impact—positively, negatively, or both—the future of the business. Boards can use this tool to evaluate the strength of their companies’ enterprise risk management (ERM) programs and reflect on the effectiveness of their own risk-oversight practices. Broken out into eight risk-management categories, this tool offers boards helpful questions about the fundamental components of ERM and the board’s oversight of ERM.
Most relevant audiences: board chairs, lead independent directors, CEOs, audit and risk committee members, chief risk officers, and heads of internal audit