Title

Engineering Value Into Enterprise Risk Management; Six Sigma Techniques Can Improve the Quality of ERM Processes and Enable Organizations to Manage Risks More Successfully

Document Type

Article

Publication Date

10-1-2008

Publication Source

Internal Auditor

Abstract

Organizations should not only recognize and minimize traditional downside risks, but also embrace upside risks, or opportunities, as a strategy for success. According to a 2005 survey by management consulting firm Booz Allen, 87 percent of the market value lost by large companies with market capitalizations over US $1 billion was the result of strategic and operational blunders. Compliance failure, typically the focus of downside risk, destroyed only 13 percent of market value during the five-year study. Faced with this counter-intuitive finding, companies may wish to pursue a more balanced and positive approach to risk management. Enterprise risk management (ERM) goes beyond mere risk mitigation and compliance--it requires a deep appreciation of upside risks, as well.

Inclusive pages

53-58

ISBN/ISSN

0020-5745

Comments

When available, the accepted manuscript (postprint) is provided in compliance with the publisher's policy on self-archiving. Permission documentation is on file.

Publisher

Institute of Internal Auditors

Volume

65

Issue

5

Peer Reviewed

yes

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