How does the application of ERM differ in making risk mitigation decisions vs. routine decision making?
Question asked by Anonymous
AFERM Experts Say...
Decision making is seldom routine. At its core ERM is the same as risk management activities conducted at lower levels within an organization. The differences lie in the objectives and the uncertainties that impact them. The objectives at an ERM level are different in that the plans are more strategic than tactical, so it follows that the uncertainties are typically broader in nature requiring the need for varied responses. The decision making process itself involves similar steps but will apply different decision criteria and engage varied levels of stakeholders within an organization.