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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 )