Betty Simkins: Good afternoon. I’m Betty Simkins, co-editor of the Journal of Applied Finance and moderator of this roundtable. In this session, we will talk about the current initiatives and issues in Enterprise Risk Management (ERM). I view ERM as a natural evolution of risk management that looks at all risks across the organization, not just narrow “silos” of risk as viewed in the past. ERM is an important discipline that is gaining popularity and recognition with many companies and also in the educational process with universities.
Let’s first begin with a definition of ERM to set the stage for our roundtable discussion. A good place to start is with the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s definition, which defines ERM:
“… as a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.”3
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