Setting objective of erm

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Setting Objective

ERM must define, for instance, the overall risk appetite and has to communicate it to all parts of a firm. Clear objectives must be defined and communicated throughout the firm. The rating of a firm has to be aligned to the risk appetite.

In enterprise

Risk management

Strategy Formulation

The management must determine the various possible strategies to ensure that risks and opportunities are identified .

The strategy setting process should be continuous which requires constant reassessment and reformation.

Strategy Implementation

The strategic objectives should be included : i.operations ii.reporting iii. compliance related objectives. It should be measurable and understood by all employees,should be dynamically adjusted, and has always been supportive and in line with the strategy of the entity.

Strategy Effectiveness

The management should regularly monitor the level of achievement of objectives' employee commitment and customer satisfaction.

Monitoring

a process that assesses both the presence and functioning of its components and the quality of their performance over time.

ensures that all components of ERM continue to function at all levels

Monitoring can be achieve through

i. ongoing management activities

ii. separate evaluations

iii. both activities.

Reference:

Enterprise Risk Management,Maturity-Level Assessment Tool

by Maria Ciorciari, MAS, FRM Dr. Peter Blattner Enterprise Risk Management – integrated framework

( Executive summary , september 2004 )