Why WP Should Apply ERM for Stakeholders

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What is ERM? According to the definition of ERM from COSO, ERM is: • A process, ongoing and flowing through a company; • Every people at every level of an organization will affect ERM; • ERM is applied in strategy setting; • ERM is applied every level and unit across the company and consider the risk at entity level; • Identify the potential risks which affect the company and manage these risks within its risk appetite; • Has the ability to provide suitable assurance to the management and boards. Why WP should implement an ERM process and what are the benefits to WP’s stakeholder? Imply ERM in WP will provide the following benefits: 1. Unacceptable performance variability reduction: the profit provided by WP over last few years varies significantly from $0 to $1,000,000. ERM will provide assessing the possibility and consequence of events happened. Furthermore, ERM will prepare the solution to avoid these events happen or control the impact when they happen. Therefore, ERM can help WP to earn a more stable profit which will be a great benefit to Peace Family, other employees and related stakeholders 2. Align and integrating different views of risk management: ERM can provide a common framework to manage different kinds of risk. It can provide WP management and board a clear view of risks management. The clearer the management understand risks, the more stable WP can be. 3. Make the stakeholders and investment parties’ confidence: If WP implements ERM process, it will increase risk management capabilities. Investors, distributor, business partner and creators will feel confidence if WP has a well-managed risks framework. 4. Corporate governance enhancement: ERM can define the roles of risk management and responsibilities, impro... ... middle of paper ... ...hese events happen or minimize the negative impact when they happened. This will stabilize the distributable profit. 2. ERM framework can enhance the Board oversight by providing more accurate and up-to-date risk related information. This will allow the Board has enough information and time to make a correct business decision to smooth the distributable profit. 3. When the business environment changes which may affect the distributable profit, ERM will help the management team to make a quick and successful respond by a serious of analysis. Therefore, it can provide a good buffer for the distributable profit when business environment changes. 4. The ERM frame helps every people in WP to have a good sense of risk management from every level. A positive risk management environment will be established in WP. This business culture can help the Board to control the risk.

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