Financial Risk Manager Part 1

Enterprise-wide risk management involves the development of structured and consistent business principles that govern the way different business units of a company do business, in regard to risk by applying consistent risk management principles across the whole of a company, all risks, including inter-departmental risks, are taken into account.

Why other options are incorrect:

• A: Applying risk management within individual departments on a piecemeal basis is a silo approach in which different departments/business units are left to manage risks on their own without considering the impact on other departments or the company as a whole.
• B: Enterprise risk management includes not only major departments in a company but also minor departments and all other areas of the company that may be exposed to risks.
• D: Enterprise risk management involves applying risk management to all business units, but it also includes a structured and consistent set of principles that guide the way risks are identified, assessed, monitored, and managed across the entire organization.