Enterprise risk management (ERM) is a business strategy focused on identifying and preparing for risks to an organization, as well as reducing the potential for negative effects on the enterprise through preventative measures.
Enterprises in all industries today face a variety of obstacles and dangers. Some enterprises have specific employees or departments solely dedicated to ERM. These professionals identify the risks pertinent to their specific enterprise, prioritize these risks, and make a plan for how to manage them.
ERM is evolving and growing as a management discipline. A company’s ERM efforts and capabilities are becoming increasingly important to stakeholders. Investors often look at the state of ERM to be sure that a company will be able to meet its goals and objectives even when facing risks.