Enterprise Risk Management
Financial institutions exists to provide value for their stakeholders. However, financial market volatility creates uncertainty, challenging management to ensure that the market volatility and all the associated loss sources are identified, measured, and aggregated while following the risk appetite guidelines from the Board of Directors. These financial institutions strive to grow stakeholder value within the prescribed guidelines, policies and procedures developed for interaction with different markets.
Uncertainty Demands Robust Enterprise Risk Management
Uncertainty presents both risk and opportunity, with the potential to erode or enhance value. Enterprise risk management enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Value is maximized when management sets strategy and objectives to strike an optimal balance between growth and return goals and related risks while efficiently and effectively deploying resources in pursuit of the entity’s objectives. Enterprise risk management encompasses:
