Final answer:
Enterprise Risk Management (ERM) addresses operational, financial, strategic, compliance, and reputation risks faced by organizations.
Step-by-step explanation:
Enterprise Risk Management (ERM) addresses a range of risks that can impact a business or organization. These risks include:
- Operational risks: These are risks related to day-to-day operations, such as equipment failure, supply chain disruptions, or human error.
- Financial risks: These are risks related to financial management, such as market fluctuations, credit risk, or liquidity issues.
- Strategic risks: These are risks associated with the long-term goals and direction of the organization, such as changes in the market, regulatory changes, or technology disruptions.
- Compliance risks: These are risks related to adherence to laws, regulations, and internal policies, such as legal liabilities or non-compliance penalties.
- Reputation risks: These are risks that can damage the reputation of the organization, such as negative publicity, customer dissatisfaction, or data breaches.
Enterprise Risk Management aims to identify, assess, and mitigate these risks through a systematic and integrated approach, helping organizations navigate uncertainties and protect their interests.