ERM Graduate Courses
Overview of Enterprise Risk Management
College of Management Faculty: Jon Bartley
Offered: Fall 2010
Enterprise Risk Management (ERM) is an integrated process of identifying, assessing and managing the overall risks of an organization that provides a broader framework for managing risk while maximizing shareholder value in the today’s complex environment. Effective ERM is based on policies and processes that are established by Boards of Directors and C-level managers. In addition, many of the most threatening risks faced by organizations are strategic in nature and can only be addressed at the top level of the organization, e.g., failures of corporate governance and ethics, increasing global competition, and threats of global catastrophe such as terrorism, pandemics, and collapse of environmental systems. Effective ERM requires informed and strategic decisions supported by operational processes and tools such as internal controls, effective audits, and effective measurement and reporting systems including external financial reporting.
Because of the increased exposure and the increased complexity and scale of risks faced by organizations, the development of enhanced processes to assess, measure and manage risks is essential. Ineffective management of risks may lead to financial distress, loss of reputation, or even the failure of the organization. Further, new regulations and best-practice standards, e.g., NYSE disclosure rules and the Sarbanes-Oxley Act of 2002, have been introduced and further elevate the importance of the risk assessment and management processes for public corporations.
The course will include an overview of risk reduction techniques including, but not limited to:
- Internal controls (financial, data, physical controls over assets)
- Contingency planning & rapid response systems
- Personnel selection, training, incentive systems
- Strategic decisions that impact operating and financial risks