(Get Answer) – You Have To Provide Response To The Below Discussion
Question: I would like for you to use your favorite search engine and find 3 articles on Enterprise Risk Management that is not earlier than 2017. In your own words provide a summary of each article you read and include its main point(s) on the topic. You will need to cite your references properly in APA format.
Fellow student submission:Shailaja:Enterprise risk management:
ERM is a rapidly growing area to manage risks in an organization related to financial, operational, technological and business risks. Risk has many definitions and varies from individual to individual. It is likely to predict that failures might happen so that hazards can be avoided in future. Risk management is more of managing the level of risk to an acceptable level. It helps the management to reduce costs because assessing the risk in advance is going to avoid accidents and save the cost of management and infrastructure in an organization (Dr.Shahzeb Ali Malik, Barry Holy, Dr. James Freeman.,March 2019).
Organizations adopt ERM as a solution to solve problems caused by risk management. Risk governance and risk aggregation are part of ERM, which address agency and information problems. These problems occur due to miscommunication or when the information is unavailable to high-level administration in the firm, hence they cannot create the firm net exposures resulting in financial crisis of the organization. Organizations have board of directors, representing on behalf of the stakeholders. So board of directors has managers to manage all the units in a firm. Managers are responsible to intimate the level of risks to the management at higher level. Monitoring the units, identifying the risks and passing them to board of directors will increase accountability so that there won’t be any bad outcomes. Training the staff and brining awareness of risk management will also help in dealing with behavioral biases, which affect risk management. Risk aggregation is another mechanism about aggregating the risk so that the organization top risks are identified (Håkan Jankensgård., March 2019).
Assessing risk is a part of risk management and its not just based on KPI’s but also depends on qualitative factors of incidents that happened recently in the organization. As companies constantly have to access capital markets to implement the strategies, ERM enables the board of directors to manage risk return trade off that are beneficial to implement strategic process which have final impact on organization outcome. Each and every organization has to define and improve their own monitoring system to improve ERM (Jan Kopia, Vanessa Just., Wiebke GELDMACHER., Aykut BUßIAN., January 2017 ).
Provide response to the above discussion.