An enterprise risk assessment (ERA) identifies and prioritizes the organization’s risks and provides quality inputs for purposes of formulating effective risk responses. Boards of directors and management need an effective ERA process to effectively discharge their responsibilities, especially in today’s rapidly changing environment.
The strategy-setting process which is fueled by an annual risk assessment will mitigate the potential disconnects in the operating environment and is “best practice” in today’s world. In this issue of The Bulletin, we focus on the vital steps in executing an effective ERA and why integrating these assessments with strategy setting is important. We also explain what ERA is, outline how it is conducted and suggest how it must be integrated with the strategic choices affecting enterprise value.