From risk management to ERM

Abstract

At one point in time, there was self-insurance. Then came risk management. Now comes the era of enterprise risk management (ERM). Traditional risk management will always be necessary, but ERM will complement existing risk activities by extending the field to cover all core risks as well as emerging and strategic opportunities, because without taking risks, organisations gain no value. In addition, ERM will be taken seriously by financial participants and stakeholders if an organisation has a risk champion in the guise of a CRO, an emerging C-level position with its own set of requirements and proper training. This paper will present the main elements of an ERM framework and characteristics of different types of ERM. It will elaborate on the main roles and responsibilities of a CRO along with potential designations that would contribute to making the position fully valued and recognised by society.