Companies and boards of directors have been managing risk in various forms for a long, long time. It’s managing risk in a unified form that’s vexing them these days.
Shaping a holistic approach to enterprise risk management is something boards know they want to do. While companies have always practiced risk management per se, ERM “brings discipline to the process,” says John Farrell, a partner with KPMG and leader of the firm’s enterprise risk management practice. He describes ERM as “a scorecard” that outlines all the risks a management team faces, how serious those risks are, and what the company is doing to mitigate them.
