Enterprise Risk Management Policy Template

Enterprise Risk Management Policy Template

[ORGANIZATION NAME]

Enterprise Risk Management Policy

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Document Control

| Item | Details | |------|---------| | Policy ID | ERM-001 | | Version | [X.X] | | Effective Date | [Date] | | Policy Owner | Chief Risk Officer | | Approved By | Board of Directors | | Review Frequency | Annual |

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1. Purpose

This policy establishes the framework for identifying, assessing, managing, and monitoring risks across [Organization Name] to support achievement of strategic objectives and protect stakeholder interests.

2. Scope

This policy applies to:

• All business units and functions
• All employees, contractors, and third parties
• All activities, processes, and decisions
• All risk types (strategic, operational, financial, compliance)

3. Definitions

• Risk: The effect of uncertainty on objectives
• Risk Appetite: Amount of risk willing to accept
• Risk Tolerance: Boundaries around risk appetite
• Inherent Risk: Risk before controls
• Residual Risk: Risk after controls

4. Policy Statements

4.1 Risk Governance

The Board of Directors shall:

• Approve the ERM framework and risk appetite
• Oversee risk management effectiveness
• Review significant risks quarterly

Senior Management shall:

• Implement the ERM framework
• Ensure adequate resources
• Foster risk-aware culture

4.2 Risk Identification

All business units must:

• Identify risks to objectives
• Document in risk register
• Update at least quarterly
• Report emerging risks promptly

4.3 Risk Assessment

Risks must be assessed for:

• Likelihood of occurrence
• Impact if realized
• Velocity/speed of onset
• Control effectiveness

4.4 Risk Response

Acceptable risk responses:

• Accept (within appetite)
• Mitigate (reduce likelihood/impact)
• Transfer (insurance, contract)
• Avoid (eliminate activity)

4.5 Risk Monitoring

Monitoring requirements:

• Key Risk Indicators (KRIs)
• Control testing
• Incident tracking
• Trend analysis

5. Roles and Responsibilities

[Define RACI for risk management]

6. Risk Appetite Statement

[Insert organization's risk appetite statement]

7. Escalation

Risks exceeding tolerance must be escalated to [specify level] within [timeframe].

8. Exceptions

Exceptions require approval from [specify authority].

9. Related Documents

• Risk Appetite Framework
• Risk Assessment Procedure
• Incident Reporting Procedure

10. Review History

| Version | Date | Changes | Author | |---------|------|---------|--------| | 1.0 | [Date] | Initial | [Name] |