The challenge ahead: Adopting an enterprise-wide approach to risk

A fundamental change is taking place in the way organizations manage risk. Known variously as integrated, strategic, or enterprise risk management, this new approach allows organizations to achieve competitive and strategic advantages through farsighted anticipation of critical events and rapid implementation of optimal decisions. An integrated approach to managing risk represents a dynamic process for optimizing the level of risk that a firm assumes in pursuit of business goals. Rather than concentrating solely on hazard risks, an integrated framework seeks to establish consistent processes for addressing all events or actions that can adversely affect an organization's ability to achieve its objectives. Individual risks are assessed, controlled, and/or financed in coordination with established organizational strategies.