Common Risk Categories in Enterprise Risk Management (ERM)
Strategic Risks
These are risks that arise from an organization’s business strategy and objectives. For example, entering a new market or launching a new product may have strategic risks associated with them.
Operational Risks
These are risks that arise from an organization’s day-to-day activities and processes. Examples include technology failures, employee errorsor supply chain disruptions.
Financial Risks
These are risks that arise from an organization’s financial operations and management. Examples include credit risk, market riskand liquidity risk.
Legal/Compliance Risks
These are risks that arise from an organization’s failure to comply with laws, regulations or industry standards. Examples include contract disputes, intellectual property disputes, employment law violations, data privacy violations or noncompliance with environmental regulations.
Reputational Risks
These are risks that arise from damage to an organization’s reputation, image or brand. Examples include product recalls, lawsuitsor negative media coverage.
