Enterprise Risk Management under Sustainability Platform

Narumon Saardchom
(NIDA Business School, Bangkok, Thailand)

Abstract: Enterprise Risk Management (ERM) has become the most important part of management for all organizational types. As a consequence of globalization, public expectations have risen that businesses should behave responsibly and accountably in terms of minimizing their environmental and social impacts. Most private organizations have developed ERM system to take into account shareholders’ interests. However, existing ERM frameworks fail to address sustainability risk as a core component even though sustainability is crucial for ERM. The area of volatility included in ERM framework should be extended to include emerging sources of instability in environment and society if the organization is to achieve robust growth and create wealth in the long run. This paper proposes ERM framework under sustainability platform and discusses required roles of board of directors and senior executives.

Key words: sustainability; enterprise risk management; environmental issue; social impact

JEL codes: M14, M19, D81