Enterprise Risk Management Essay

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Final Exam Project Enterprise Risk Management For a Financial Institution Alejandro Quezada – Spring 2013 TAMIU BA 5399-270 Bank Risk Management – Spring 2013 Professor Oscar Cisneros Content 1. Introduction & Overview: 1.1 What is Enterprise Risk Management 1.2 What is Risk Appetite 1.3 Value of Risk Assessment 1.4 Goal of an Enterprise Risk Management 2. Strategic Implementation 2.1 Steps for Implementation 2.2 Strategic approach 2.3 Methods and Procedures 3. Benefits and Obstacles What is Enterprise Risk Management (ERM) • Risk management is a process for identifying, assessing, and prioritizing risks of different kinds. • EMR in a business includes the methods and processes used by organizations to manage risks and seize opportunities related to the achievement of their objectives. • 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 also be described as a risk-based approach to managing an enterprise, integrating concepts of internal control and strategic planning. Risk Appetite Risk Appetite is a method to help guide an organization's approach to risk and risk management. The level of risk that an organization is prepared to accept, before action is deemed necessary to reduce it. It represents a balance between the potential benefits of innovation and the threats that change inevitably brings Levels of risk appetite Averse Avoidance of risk and

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