Enterprise Risk Management

Enterprise risk management (ERM) is a methodology that looks at risk management strategically from the perspective of the entire firm or organization. It is a top-down strategy that aims to identify, assess, and prepare for potential losses, dangers, hazards, and other potentials for harm that may interfere with an organization's operations and objectives and/or lead to losses. ERM takes a holistic approach and calls for management-level decision-making that may not necessarily make sense for an individual business unit or segment. It not only calls for corporations to identify all the risks they face and to decide which risks to manage actively (as other forms of risk management may), but it allows top managers to make executive decisions regarding risk management that may or may not be in the particular interest of a certain segment—but which optimizes for the firm as a whole. This is because risks can be siloed in individual business units that do not or cannot see the bigger risk picture. It also often involves making the risk plan of action available to all stakeholders as part of an annual report. Industries as varied as aviation, construction, public health, international development, energy, finance, and insurance all have shifted to utilize ERM . The aim for this article is to show how ERM is applied in Project Management bringing into attention