Risk does not always come in small, neat packages.

Regulators and stakeholders want to know what you are doing about how your whole business is handling risk.

Enterprise Risk Management is the answer.

Why Enterprise Risk Management (ERM)?

A piecemeal approach to risk is often not enough in these rapidly changing and uncertain times.  Corporate governance regulations in China are becoming increasingly demanding of management to report risk issues, their financial implications and how they are being managed through a robust mitigation strategy.

Risks such as competition, loss of staff and regulatory change need to be understood and linked to an organization’s corporate strategy.  Monitoring systems should be put in place so that everyone contributes to managing an organization’s risks.

Understanding the critical risks an organization faces creates an opportunity to proactively manage them which can ultimately give you a competitive advantage.

As an executive manager or board member, you need a framework that encompasses your whole enterprise, to protect against risks that threaten your company’s earnings, assets, reputation – and you.

Benefits

An ERM framework promotes better decision making to protect and enhance your enterprise value. This is designed to link directly with the business, goals, objectives and strategies of the organization. The major benefits of ERM include:

• More efficient capital allocation and stronger financial outlook through focusing resources where it really matters
  
  
• Better risk information for the Board of Directors, external investors and stakeholders
  
  
• Clear understanding of risk profile across all operations
  
  
• Improved risk awareness leading to improved decision making
  
  
• Assist in meeting Corporate Governance requirements
  
  
• Improved credit rating to lower financing cost
  
  
• Achievement of strategic objectives through a holistic view of risks across the organization

The following diagram illustrates an ERM framework in more detail:

Click the the diagram to zoom.

Marsh can help

Marsh is an acknowledged leader in the risk management field, with high standard of service provided in the Asian region.

Marsh’s ERM Practice, as a part of Marsh Risk Consulting (MRC) practice, offers a broad range of services designed to assist clients in developing their risk management strategies that support organizational objectives.