Enterprise Risk Management (ERM) standards are prescriptions that provide organizations a structure for controlling risks. Organizations may identify, evaluate, and manage risks that could have an impact on their operations, financial performance, and reputation.
There exist two widely referenced frameworks;
1. Committee of Sponsoring Organizations of the Treadway Commission COSO ‘ERM – Integrated Framework’; and
2. The guidance developed by Airmic and the Institute of Risk Management IRM – ‘A structured approach to ERM and the requirements of ISO 31000’
We will briefly go through some of the most well-known ERM standards in this article.
ISO 31000:2018
It provides businesses with a framework for managing risks by outlining principles, a risk management process, and a risk management framework. The standard emphasizes the need for businesses to integrate risk management into their decision-making processes and to continually improve their risk management practices.
COSO ERM
It provides businesses with a framework for managing risks by outlining eight components of ERM, including internal environment, objective setting, event identification, risk assessment, risk response, control activities, information and communication, and monitoring.
NIST Cybersecurity Framework
The National Institute of Standards and Technology (NIST) Cybersecurity Framework is a standard that provides businesses with a framework for managing cybersecurity risks. It outlines a set of cybersecurity best practices that businesses can use to identify, assess, and mitigate cybersecurity risks.
ITIL Risk Management
The Information Technology Infrastructure Library (ITIL) Risk Management standard is a framework that provides businesses with a structured approach to managing risks associated with IT services. The framework emphasizes the need for businesses to identify, assess, and mitigate risks associated with IT services to ensure the availability, reliability, and security of IT services.
In conclusion, ERM standards provide businesses with a framework for managing risks. By following these standards, businesses can identify, assess, and mitigate risks that could impact their operations, financial performance, and reputation. While there are many ERM standards available, businesses should select the standard that best aligns with their business objectives and industry-specific risks. By implementing an ERM standard, businesses can improve their risk management practices and ensure their long-term success.
