Final answer:
The responsibility for implementing Enterprise Risk Management (ERM) lies with management throughout the organization, not just with specific officers, to ensure a culture of risk awareness and its mitigation.
Step-by-step explanation:
Enterprise Risk Management (ERM) is a comprehensive and integrated framework that requires the engagement of individuals at every level of an organization. When considering who is responsible for its implementation, one might think of specific roles such as the chief financial officer, the chief audit executive, or the chief compliance officer.
However, effective ERM requires a collaborative approach where management throughout the organization plays a crucial role.
The board of directors, which represents the shareholders' interests, has a significant part in oversight of ERM practices. They work together with auditing firms that review financial records and with major outside investors, such as mutual and pension funds, to ensure the integrity of financial information.
The downfall of Lehman Brothers highlighted the catastrophic consequences when corporate governance fails to provide reliable financial information.
Therefore, while certain officers may have specific responsibilities related to risk management, it is the collective responsibility of management at all levels to ensure the successful implementation of ERM.
This approach contributes to a culture of risk awareness and helps in the mitigation of potential risks that can affect an organization's strategic objectives and operational effectiveness.