All management is essentially about risk management, anticipate and prepare for any unexpected events with the likelihood to harm or cause losses to your business.
Creation of a more risk-focused culture for the organization; Communication and discussion of risk is recognized as not only a process to provide information to senior management but a way to share risk information within and across operations of the company and allow better insights and decision-making concerning risk at all levels.
Standardized risk reporting; ERM supports better structure, reporting and analysis of risks. Standardized reports that track enterprise risks can improve the focus of directors and executives by providing data that enables better risk mitigation decisions.
Improved focus and perspective on risk. It develops leading indicators to help detect a potential risk event and provide an early warning. Effective ERM processes also give management a framework to evaluate as an opportunity to increase competitive positions and exploit certain market and operational conditions.
Efficient use of resources: Developing an ERM program improves the framework and tools used to perform the critical risk management functions in a consistent manner. Eliminating redundant processes improves efficiency by allocating the right amount of resources to mitigating the risk.
Effective coordination of regulatory and compliance matters. Since ERM data involves identifying and monitoring controls and mitigation efforts across the organization, this information can reduce the effort and cost of such audits and reviews.