ERM: the impact of a different risk management approach

Abstract

Enterprise Risk Management (ERM) has increasingly captured the attention of risk management professionals and academicians. Differently from the classical approach to corporate risk management based on a “silo” setting, ERM enables firms to benefit from an integrated approach to manage corporate risks. In particular, it shifts the focus from primarily defensive to increasingly offensive and strategic management of the enterprise risks. This research will investigate the following areas: • Review of literature contributions on this risk management approach considering, in particular, the “COSO Framework”; a comparison between the COSO and the ISO frameworks will also be proposed. • Analysis of the various sectors, industries, and areas in which ERM is most effective and can be applied, with a particular focus on the banking sector, considering the main risks of this industry and possible hypothesis of Risk Management (RM) process phases. • Evaluation of the effectiveness of ERM in terms of enhanced value of the firms adopting this technique, through the analysis of various studies on the field; a practical case will also be considered, exemplifying a full RM process, in connection with some specific kind of risks faced by a luxury car manufacturer. • The ERM approach should take into consideration all the possible risks for a firm. One of the goals of this analysis will be to examine how the mismanagement of the climate component might influence the perception of the brand in an even more environmental-friendly market; an analysis of the the ERM influence on the credit score assigned by CRAs will also be presented.

A complete report where methods and results of the performed analysis are discussed will be part of the research output.