ADM 4341 Study Guide - Final Guide: Risk Aversion

• School: University of Ottawa
• Department: Administration
• Course: ADM 4341
• Professor: Chris Liboiron

Document Summary

Definition: erm is the process of planning, organizing, leading and controlling the activities of an organization in order to minimize the effect of risk on an organization"s capital and earnings. Criteria for a robust erm: enterprise wide. Risk: some might miss major risks because they think that an area of the company is. This could have a devastating effect on the company especially if someone in the company knows these areas aren"t controlled: includes all risks. Risk: lack of support for operational or strategy risks. This could lead to poor hiring and poor employee performance: focus on key risks. Risk: a company with a bad cost to benefit ratio, if they spend money inefficiently then they will spend too much money and implement controls that are not necessary: aggregates metrics. Risk tolerance will not be accurately estimated and there may be either too many or not enough: appropriate risk disclosures.