ERM Improves Business Performance

Enterprise risk management (ERM) is the process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effects of risk on an organization's capital and earnings. Enterprise risk management expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks.- SearchCIO.com

According to a post by Steven Minsky, founder and CEO of LogicManager, Inc, he has developed the RIMS Risk Maturity Model, which could be used by risk managers to meet the requirements of their company's ERM programs. Steven had assessed data over the last 14 months using this model to assess the ERM programs of 564 companies.

This study had four major findings, but I would like to highlight the first one; 93% of companies with an ERM program, make better risk management decisions than those without it. This model proves that when ERM programs are implemented properly according to the ERM guidelines, it could lower costs of capital and also improves business performance.