COSO ERM Creating and protecting value

Over the past few decades, enterprise risk management (“ERM”) has been receiving increased attention by boards and executives and has undergone a continuing evolution in its development and uses. Along the way, lessons have been learned and ERM has been better understood regarding its benefits, objectives, and role in the organization. This COSO thought paper takes advantage of lessons learned and new guidance on enterprise risk management published by COSO to provide directors and executives with a better understanding of the role of enterprise risk management in creating and preserving value and its relationship to the key strategies of the organization. While not a detailed implementation guide, this paper includes overall guidance and an outline of succinct tangible steps that can used to implement an effective ERM program. 

This thought paper outlines and provides clarity on the role and value of enterprise risk management to help directors and executives answer several key questions including: “What is the real value of enterprise risk management?” “What is its role and objectives? “What are the practical steps that can be taken to implement enterprise risk management? 

The approach and steps contained in this thought paper are based on successful practices that organizations have used to take an incremental, step-by-step approach to implement enterprise risk management. While this is not the only way to implement ERM, this incremental approach is designed to be very adaptable and flexible. The approach provides practical steps that can help take conceptual ideas of strategy and risk and actualize them through a series of basic steps.