Recent years have seen heightened concern and focus on risk management. It became increasingly clear that a need existed for a robust framework to effectively identify, assess and manage risk.
In 2001, COSO initiated a project and engaged PricewaterhouseCoopers to develop a framework that would be readily usable by management to evaluate and improve their organisations' Enterprise Risk Management ("ERM"). This Integrated ERM Framework expanded on internal control, providing a more robust and extensive focus on the subject of ERM.
PricewaterhouseCoopers : thought leader
PricewaterhouseCoopers is the thought leader behind COSO's Integrated ERM Framework. This framework, along with our proprietary guidelines, forms the basis of our ERM service offering. Our approach and methodology is flexible and can be customised and adapted to each organisation's specific needs. PricewaterhouseCoopers' methodology consists of four distinct phases:
Assess
Assess the client's current approaches to risk management and analyse their ERM profile;
Design
Define the future ERM framework and associated organisational business case;
Construct
Design supporting policy changes, processes, procedures, organisational changes, training and any other supporting systems and to prepare implementation plans; and
Implement
Implement, monitor and continuously improve the policies, processes and technologies to achieve planned business outcomes and benefits of ERM.
How PricewaterhouseCooopers can help you
Among the most critical challenges for management is determining how much risk their organisation is prepared to accept and does accept as it strives to create value. The COSO framework will better enable them to meet this challenge. isk Tolerances
Every organisation must cope with factors that create uncertainty. Uncertainty creates both risks and opportunities which can either erode or enhance value. Until now, ERM as a concept has suffered from a lack of support. This is part due to a lack of understanding, competing ERM theoretical frameworks and a lack of experience amongst those translating ERM theory into practical value.
PricewaterhouseCoopers' methodology addresses these challenges by providing an approach which can be used to:
- Establish sound foundational principles for ERM through the use of relevant standards and frameworks;
- Develop tangible and measurable benefits against which to evaluate ERM; and
- Implement ERM to meet the needs of a specific business environment and level of risk management maturity.
