Organizations of varying sizes and across industries have implemented Enterprise Risk Management (ERM) programs that aim to provide management and the Board of Directors with information on risks and opportunities that may influence decision-making and business

In the current COVID-19 environment, many companies realise they may not be prepared to manage the risks effectively. While many  companies have thus far adopted risk management practices on paper, the COVID-19 pandemic has shown a clear business case for managing risks from an enterprise-wide perspective. The crisis has turned out to be a wakeup call for organizations to recognise that companies need to evolve from a ‘Risk listing’ to a ‘Risk informed’ decision-making approach.

An effective ERM program provides Management and the Board with relevant information -regarding risks, uncertainties and opportunities -that can influence decision-making during strategy and objectives setting and performance management.

ERM integration with strategy and performance becomes a reality when risk identification, quantification, management and monitoring activities are performed during the evaluation and selection of strategic options, the development of strategic and business plans, and the execution of those plans. This focused integration allows management and the Board to make relevant and timely decisions based on “riskreturn” considerations. Without it, ERM remains an accessory, which reduces its impact. Forward thinking companies are aware that an effective ERM helps to anticipate, adapt and respond to changes, focusing efforts and resources on risks and opportunities that can impact organization’s strategy and performance.

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