Enterprise risk management for companies has become a strategy
post 1:
Enterprise risk management for companies has become a strategy that is continuously changing how organizations are approaching the issue of risk management in their entities. How critical these plans have become in the identification and preparation for events that may cause disruption has meant that organizations are now able to implement them to not only have control over their environment but as a way to gain an advantage on the competition. (Spekman, & Davis, 2004) believed that “for any enterprise that is seeking operating efficiency, then an enterprise risk management is one of the ways this can be done”.
From the two chapters describing the implementations by TD Bank and Zurich Insurance Group, it is evident that both implementations are similar in the way they have been approached. Some of the evident similarities are that there has been specific attention to the process which is aimed at the identification of the risks that exist in both entities. Another similarity is that there have been efforts made to ensure there are teams in place which are tasked with implementing the ERMs in the institutions. The major difference between the two implementations is the structure used in implementing enterprise risk management.
I would be open to the idea of implementing the enterprise risk management plans that have been used in the two entities. This is because the format and process that needs to be followed to ensure that the plans in place are robust have been followed in the two implementations to an acceptable degree. The implementations that have been used by the two companies are likely to be successful in the next years because they bear the hallmarks of good enterprise risk management programs. According to (Sobel, & Reding, 2004), “an effective risk management plan is supposed to have a grasp of the future and be in tandem with the objectives of the company”.
post 2:
The Risk identification and assessment at TD bank is focused on recognizing and understanding the existing risks that may arise from new or evolving business initiatives, and emerging risks from the changing environment. Depending on the risk type, the risk identification and assessment process may be developed and/or controlled by the business segment with oversight provided by Risk Management, or it may be controlled by a function within Risk Management. TD’s risk culture and ensuring stakeholders to have a common understanding of how TD manages risk and address with the following criteria:
Nature of the risks for business strategy and operations
Exposure on different types of risks
Manages identify, measure, assess, control, and monitor risks
TD’s Risk Appetite Statement is used to communicate how TD views risk and determines the risks it is willing to take in order to grow its business. The bank considers its mission, vision, guiding principles, and strategy, as well as risk philosophy and capacity to bear risk, and acclaiming the business strategy, and managed do not expose the enterprise to any significant single-loss events Do not risk harming the TD brand.
The Group Risk Management organization at Zurich consists of central functions at the Corporate Center and a decentralized risk management network at all the segment, regional, business unit, and functional levels. At the Group level there are two centers of expertise: risk analytics and risk and control. The major element of Zurich’s ERM framework is to establishing transparency of risk reporting standards throughout the organization. It regularly reports on its risk profile, current risk issues, adherence to its risk policies, improvement actions both at a local and on a senior management level. Zurich has procedures in place for the timely referral of risk issues to senior management and the board of directors. Various governance and control functions coordinate to help ensure that objectives are being achieved, risks are identified, and appropriately managed, and internal controls are in place and operating effectively.
post 3:
According to Sax & Anderson, (2018), Enterprise risk management refers to the plan which a company puts into running so that they are able to recognize all the threats which they are likely to face and come up with strategies to avert these threats from happening. When these risks happen, they would lead to the disruption of activities of the company and may even cause the fall of the company. TD Bank is a company which is based in Toronto Canada. It has several employees and its main intention is to give services to their clients which are of a financial nature. This bank specializes in Retail services both in Canada and in the US and it also deals in wholesale banking. This bank faced a lot of risks which necessitated the development of an ERM. Such risks include the strategic risk, credit risk, liquidity risk, operational risk, insurance risk, reputational risk and the legal risk. Due to these risks, they implemented an ERM framework which would be responsible for directing the risk management. It did this by identifying the risks that they were likely to face, quantifying these risks, evaluating them and monitoring them. They perceived the risks to be an opportunity to aid the growth of the business.
Zurich Insurance Group also a financial institution deals with providing insurance to their customers. This organization also implemented an ERM plan which focused on modifying the risk that they were facing to turn into an advantage. The plan provided for and advocated for the presence of governance which was demonstrated by the presence of measures to provide for risks management. They also have a set of guidelines which governs how the risks are managed. These two financial institutions contain an ERM implementation framework which is similar and which is meant to monitor the risks that they face and in turn convert then to be able to allow them earn value (Wang, Lin, Werner & Chang, (2018)). I would implement the same ERM. This ERM will be very successful in the coming years.
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