Integrated Enterprise Risk Management: From Process to Best Practice

Abstract

There are strong motivating factors for increased awareness and action with regard to Enterprise Risk Management (ERM). Effective ERM policies and practices are lauded to increase stakeholder confidence, competitive advantage and ultimately an organization’s long-term viability. However previous studies suggest that the concept is poorly understood in practice and organizations are failing to implement the intended benefits. Furthermore, insufficient research has been conducted in this area and there are few comprehensive or practical guides available to managers in his domain. This paper attempts to address this deficit and expand the discussion on integrated enterprise risk management practices. The study presents findings from a qualitative study where critical success factors for effective enterprise risk management are identified and categorized. From this analysis an audit tool to assess ERM best practices is presented. The tool acts as an independent validation resource to ensure that an organization’s efforts are proactive and effective against current and emerging threats. The contributions of this research are many. First it enhances knowledge and skills in a neglected but essential multi-disciplinary area. Second the research is grounded in best practice and so adds to academic debate by validating and contradicting previous studies. Third the development of new and innovative tools in enterprise risk management adds bridges the gap from theory to practice.