· “A process of identifying and prioritizing risks so that an agency can deal with event that are most important 36”.
· The “the (COSO) Committee of Sponsoring Organizations of the Treadway Commission” guidelines defiend the “Enterprise risk management as a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives 71″.
· ERM consist of the process for identifying and managing potential events before problems occur rather than responding and reacting to threats after the fact, when the damage has already been done that could affect the entity’s ability to manage business risks then they remain within its risk appetite 70. Essential function of corporate governance that addresses the management of risks within an organization”. The involvement of this governing bodies is critical to enact the ERM vision since they take accountability on overseeing the portfolio of risks that the organization faces.This view is consistent with trends in corporate governance strategy that views ERM as an integrated approach for determining the business risks that impact an organization’s ability to achieve its business objectives and to develop programs for managing the identified risks 70.
· Applying an effective competitive advanctage will lead to :-
o Increase the stakeholders confiendt in dealing with the organization
o The organization will have a good points in the competitive advantage.
o If the leadership of corporate boards is engaged with the risk managmnet requriemnt will lead to the maixium stability for the organization in front of the event sthat could prevent the objectvies achivments.
o 50, has linked between the organization performance improvments and applying a risk management.