Enterprise risk management relevance, core elements and implementation

Essay from the year 2016 in the subject Business economics - Investment and Finance, grade: B+, University College Dublin (Institute of Banking), course: MSC Financial services, language: English, abstract: This paper outlines the core elements of enterprise risk management (ERM), key factors for its successful implementation under ISO 31000 guide, highlighting the importance of risk culture and analyzing the financial crisis from a risk management viewpoint. Risk awareness and a strategic view of risk management have proved being key drivers for long-term results in all types of organizations; in the financial services industry the risk is part of the business and the importance of reassessing it becomes evident after the recent financial crisis has shown a weak risk management culture among financial institutions worldwide including the ones that called themselves low risk. Such exposure to risk has been mainly brought up from failures in the recognition and evaluation of risks. A risk is anything which can affect the business, institutions or individuals in a different way from the one expected, so that it could be a negative, positive or neutral deviation. A solid risk management links a risk awareness culture to the organizations strategical objectives expanding responsibilities along the structure and building resilience and continuous improvement. An enterprise risk management (ERM) is a complex system englobing different actors and levels of an organization aligning strategic objectives to tactical management and operational process. The International Organization for Standardization (ISO) 31000 is a standard for risk management providing requirements and directives for ERM application.