Enterprise Risk Management: Benefits and Challenges

In this paper, we have provided the introduction to the Enterprise Risk Management (ERM) process by defining ERM, highlighting key keys of an ERM program in an organization, and discussing the COSO and ISO ERM frameworks. Reasons for ERM implementation by firms are also discussed along with the benefits that the organizations gain by integrating their strategic planning with the ERM process. Financial, infrastructure, reputational, and marketplace related benefits are discussed and shown to be leveraged by the firms that implement an effective ERM practice. The key challenges along with their solutions are discussed in this paper where it is shown that ERM practice must be established and implemented keeping best practices in mind so that any unforeseen failures in the future can be avoided. The paper further highlights the important hallmarks of an effective ERM program where nine major points are discussed that came out from a survey addressing the ERM best practices and features. Finally, a case study of the LEGO company is presented.