engleski

A New Era of Risk Management – An Integrated Approach to Corporate Risks

Risk management is an important element of an efficient and comprehensive corporate governance system. It is defined as a combination of activities that minimize the negative impact of a risk exposure to the company’s expected profits and cash flows, and consequently the value of the company. This chapter analyzes an integrated risk management approach to corporate risks in terms of achieving the fundamental company’s goal – stockholder wealth maximization, but taking into consideration the value of other stakeholders. The chapter is a combination of a critical review of existing literature and fundamental exploratory research as the author presents her own ideas on the enterprise risk management process and brings reflections on the importance of its wider implementation in the companies around the World. The main objectives of this chapter are (1) to explain the characteristics of the ERM system and its advantages over traditional risk management (TRM) based on the assessment and management of individual risks without considering the correlation between different types of risk and without assessment of the overall company’s risk exposure (2) show the ERM process as seen by the author of the chapter. Analysis presented in the chapter should attract broader reading public, notably academics who will deepen their knowledge on the ERM system, as well as practitioners who want to implement or improve ERM in their organizations.

enterprise risk management, corporate governance, ERM process, risk management strategies

nije evidentirano