Enterprise-wide risk management is a process that involves people at every level of the firm in setting strategy and making operational decisions based on an analysis of events that may impact the firm.
Through an enterprise-wide risk-management framework, an entity can better limit exposures within its risk appetite and provide its management and board of directors with reasonable assurances regarding the achievement of the organization’s objectives. Recent operational breakdowns at financial institutions underscore the need for enterprise-wide risk management. As organizations expand into more lines of business, inherent conflicts of interest become more likely.