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Answer: The ERM program should provide an integrated strategy to manage risk across the company as a whole.
## Explanation Option D is correct because it reflects the core principle of Enterprise Risk Management (ERM) - providing an **integrated strategy** to manage risk across the entire organization. This is consistent with modern ERM definitions that emphasize: - **Holistic approach**: Viewing risk management as an enterprise-wide activity rather than siloed functions - **Strategic integration**: Aligning risk management with business objectives and strategy - **Cross-functional coordination**: Managing risks across all business units and departments **Why other options are incorrect:** - **A**: ERM is not primarily about cost reduction or transferring risks - it's about understanding and managing risks strategically - **B**: While reducing earnings volatility can be a benefit, it's not the primary goal of ERM programs - **C**: ERM should be integrated with operations, not managed separately, to be effective ERM's fundamental purpose is to create a unified framework that enables organizations to identify, assess, and manage risks in a coordinated manner across the entire enterprise.
Author: LeetQuiz Editorial Team
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A board of directors is evaluating the implementation of a new ERM program at an asset management company. Which statement below is consistent across the various current definitions of an ERM program and most appropriate to be included in the company's ERM definition and goals?
A
The ERM program should reduce costs by transferring or insuring most of the company's major risk exposures.
B
The major goal of the new ERM program should be to reduce earnings volatility.
C
The ERM program should be managed separately from the operational side of the company.
D
The ERM program should provide an integrated strategy to manage risk across the company as a whole.
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