ERM is dead – long live EROM !

What???

Of course ERM is not dead, much to the contrary: recent studies show a strong correlation between the quality of a company’s ERM and the stock price. The correlation appears to be worth up to 25% better company valuation. That is serious money!!

However, wide-spread perception associates something negative with the word “risk”. If you doubt this statement, have a look at Wikipedia’s “definition of risk”. The majority of descriptors have a negative connotation, such as “loss, injury, damage, negative occurrence, et cetera”.  

I look at risk more broadly: my conversations about risk always encompass the  upside and the downside. “Risk creates opportunity”, Megrow’s tag-line, reflects that mind-set. I ask: “what else can we do with the glass”, instead of “is it half full or half empty”?

EROM

Therefore, I propose to add the letter “O”, representing OPPORTUNITY, to the ERM terminology. Enterprise Risk and Opportunity Management (“EROM”) is born!