Legal and Regulatory Aspects of Enterprise Risk Management for Small and Medium-Sized Enterprises

While Enterprise Risk Management (ERM) has emerged as a focus of attention in the context of corporate governance in recent years, the implementation of ERM by Small and Medium-Sized Enterprises (SMEs) has garnered relatively little attention from lawmakers and regulators. To rectify this gap, this chapter explores two important ERM issues applicable to SMEs. First, we examine the integration of ERM principles in the operations of SMEs, specifically including the implementation of legal risk management, and describe the structural and attitudinal factors that hinder its effectiveness. Second, we examine ERM-oriented corporate governance regulations, and consider their potential usefulness to SMEs. Drawing from our analysis of these two issues, we suggest ways in which SMEs can more effectively implement and use ERM.