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Enterprise risk management: Challenges and the strategies for success

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  • Kingsley Karunaratne Alawattegama

    (Department of Accounting, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Colombo, Sri Lanka)

Abstract

The objective of this paper is to identify the challenges of implementing and adopting an effective ERM system and to suggest alternative strategies that could be pursued as countermeasures to those challenges. This study is based on survey data gathered from 379 respondents representing 129 companies listed on the Colombo Stock Exchange of Sri Lanka. This study found that the lack of availability of information to make risk-based decisions; the need to ensure that all decisions are made within the organization’s risk tolerance level, and the lack of top management support for ERM implementation; are the most influencing challenges for business organizations that obstruct ERM effectiveness. This study suggests that organizations should promote a good corporate culture that fosters ERM supportive internal environment. It is also suggested that the support of the top management and their commitment to being corporative with the firms’ ERM function without making ERM is the sole responsibility of the finance people. Further, it is suggested that organizations have a designated position dedicated to overseeing the ERM function and providing executive leadership for its effective implementation. Key Words:Chief Risk Officer, Enterprise Risk Management, Integrated Risk Management, Risk culture, Strategies

Suggested Citation

  • Kingsley Karunaratne Alawattegama, 2022. "Enterprise risk management: Challenges and the strategies for success," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 110-115, September.
    • Handle: RePEc:rbs:ijbrss:v:11:y:2022:i:6:p:110-115
    DOI: 10.20525/ijrbs.v11i6.1931
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    References listed on IDEAS

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    1. Robert E. Hoyt & Andre P. Liebenberg, 2011. "The Value of Enterprise Risk Management," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 78(4), pages 795-822, December.
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