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Ethics of Enterprise Risk Management as a key component of Corporate Governance By Elena Demidenko and Patrick McNutt
| Content Provider | Semantic Scholar |
|---|---|
| Author | Demidenko, Elena McNutt, Patrick M. |
| Copyright Year | 2009 |
| Abstract | Purpose – The purpose of the paper is twofold: first to add to the debate on good governance and ethics of Enterprise Risk management, second to describe an ethical maturity scale based on duty and responsibility for practical implementation to ensure better governance. Design/Methodology/Approach – The methodology has centred on risk governance as a way for many organizations to improve their risk management practices from an ethical perspective based on responsibility and on fulfilling one’s duty within the organisation. Findings While companies in Australia, for example, are more mature than those in Russia in terms of governance systems life cycle, there are a number of common international challenges in risk governance implementation. These relate to a link between risk framework, enterprise value model and strategic planning; to a definition of risk appetite, the embodiment of risk management in organizational culture, internal audit and ERM function, the evolving role of a Chief Risk Officer (CRO), and senior management buy-in and sponsorship of the integrated ethical risk management from a CEO. Practical Implications/limitations Enterprise Risk management [ERM] a way for many organizations to improve their risk management practices is a key component of the applied ethics of corporate governance. It has developed into a philosophy to assist organizations with the process of protecting shareholders’ value while also increasing the bottom-line profitability. Effective ERM is based on ethical risk governance. Internal audit needs to be involved in the process of integrating risk management and compliance. It should maintain a degree of independence when assisting with ERM establishment. CRO is most effective when reporting to the Board. Originality/value – Global companies are becoming more accountable to multiple stakeholders. It is the adoption of an ethical code to arrest the lack of clarity of roles ascribed to the audit committee and risk committee and management’s accountability that remains the challenge across different jurisdictions. In attempting to implement |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.patrickmcnutt.com/wp-content/uploads/Ethics_of_enterprice_risk_management.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
