Enterprise Risk Management (PowerPoint PPTX)

The enterprise risk management framework's structure applies regardless of the size of the institution or how an institution wishes to categorize its risks. The circular depiction of the framework is highly intentional. The individual components (such as coverage or risk appetite) are not meant to be sequential, but rather a dynamic flow in both directions. Additionally, culture is depicted as the center/heart/foundation of this model since, without the right culture, the other components are somewhat irrelevant.

This ERM framework was designed to help management and boards of directors answer these relevant business questions:

What are all the risks to our business strategy and operations (coverage)?
How much risk are we willing to take (risk appetite)?
How do we govern risk-taking (culture, governance, and policies)?
How do we capture the information we need to manage these risks (risk data and infrastructure)?
How do we control the risks (control environment)?
How do we know the size of the various risks (measurement and evaluation)?
What are we doing about these risks (response)?
What possible scenarios could hurt us (stress testing)?
How are various risks interrelated (stress testing)?

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