ABSTRACT
This chapter highlights the common elements of risk management that chief executive officers, top management teams and boards of directors should focus on to avoid excessive risk in their organizations. It introduces the enterprise risk management (ERM) approach and provides a detailed description of the methodology based on an actual example of an electricity utility firm. The chapter presents general criteria and key elements of the ERM capability maturity model as an implementation tool. It describes an example of ERM implementation in the mining industry. A study on 225 public and private organizations based in Australia, Canada, the United Kingdom, the United States and other countries found that companies with an advanced implementation of risk management methodology (RMM) were valued at up to 25 percent more than those without RMM tools. ERM is a comprehensive RMM that treats corporate risks in a systematic and integral manner.
