New enterprise risk management guidance released by COSO

Published: Wednesday, 05 February 2020 08:27

To further inform organizations on the benefits of enterprise risk management, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) has published new guidance, ‘Creating and Protecting Value: Understanding and Implementing Enterprise Risk Management’ offering ‘succinct, tangible steps to implement an effective ERM program’.

The project was commissioned by COSO and co-authored by DePaul University’s Richard J. Anderson, Clinical Professor of Strategic Risk Management, and Dr. Mark L. Frigo, Co-founder and Director Emeritus of the Strategy, Execution and Valuation Initiative & Strategic Risk Management Lab at the Kellstadt Graduate School of Business/Driehaus College of Business - School of Accountancy & MIS.

“Together with COSO’s Enterprise Risk Management – Integrating with Strategy and Performance and other COSO guidance, this paper is a good starting point for an effective ERM initiative,” said Paul Sobel, COSO Chairman. “The goal is to develop a momentum for ERM to expand and deepen the organization’s strategy-setting, performance, and risk-management processes in pursuit of creating and protecting value.”

The guidance is based on successful practices used by organizations in taking an incremental, step-by- step approach to implementing ERM.

As noted in the paper, any ERM initiative needs to be tailored carefully to the needs of a specific organization. The updated COSO ERM Framework clarifies both the relationship between strategy and risk and that the objective of ERM is to assist the organization to achieve its strategy and business objectives. Understanding those two key points is not only critical for success but important in setting and communicating the risk culture of the organization.

Read ‘Creating and Protecting Value: Understanding and Implementing Enterprise Risk Management’ (PDF).