Today at the starting days of the 21st century, technology we are now living in the 21st and it brings with it enterprises with innovative, complicated technologies and everyone in an entity has some responsibility for enterprise risk management. The underlying premise of and Enterprise Risk Management (ERM) is that every entity exists to provide value for its stakeholders. Value is maximized when management sets strategy and objectives to strike an optimal balance between growth and return goals and related risks, and efficiently and effectively deploys resources in pursuit of the entity’s objectives. The purpose of risk management is to identify potential pitfalls or problems before they ...view middle of the document...
Risk management is carried out as a holistic, organization-wide activity that addresses risk from the strategic level to the tactical level, ensuring that risk-based decision making is integrated into every aspect of the enterprise. There are eight pertinent risk management components that I have gathered, these are the following:
* Internal environment is the people, risk management philosophy and risk gusto, integrity and ethical values, and the environment in which they function as one.
* Objective Setting – objectives must exist before management can identify potential events affecting their achievement. A set of objectives must be in place and that the chosen objectives support and align with their mission and are consistent with its risk gusto.
* Event Identification
* Risk Assessment – A risk assessment is a careful examination of what, in the work, could cause harm to people, so that you can weigh up whether you have taken enough precautions or should do more to prevent harm. It not only helps one to evaluate the risk but also help in measuring and reviewing the risk.
* Risk Response – is to provide a consistent, organization-wide,...