CHAPTER 9

Governance and ERM

What Is Governance?

Governance is ensuring that the control and processes are in place so that the people of the organization, and that the organization as a whole, is doing the right thing. ERM is both a system that needs good organization governance, and also a system that helps to create good corporate governance. In other words, ERM can greatly help create an organization that has great corporate governance, but ERM itself needs good corporate governance. Perhaps it was best put by James Lam in his genre defining book “Enterprise Risk Management: From Incentives to Controls,” when he stated, “We want to operate in an environment in control, not a controlled environment.”1

Good governance does not just happen. ...

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