Research On Strategic Risk Management Based On ERM Framework

In recent years,strategic risk management has received more and more attention,and the status of strategic risk management in the comprehensive risk management of enterprises has been rising year by year.This paper examines the issues related to strategic risk management based on the five elements and twenty-three principles of the new COSO-ERM framework 2017 edition,by selecting incidents in which the Storm Group was exposed to strategic risks due to the implementation of strategies such as diversification and blind acquisitions.By studying and analysing the problems of strategic risk management in the Storm Group,we can provide reference and inspiration for the business development of other enterprises.Firstly,the paper analyses the strategic risk exposure of the Storm Group:the founder’s subjective reasons leading to poor strategic decisions,the aggressive development strategy deviating from the Group’s actual capabilities and deviating from the main business,the frequent changes in the Group’s development strategy,and the high-risk financing accelerating the strategic risk exposure.Next,we analyse the impact of the strategic risk exposure of the Storm Group:leading to a gradual deterioration in profitability,leading to a gradual weakening of the Group’s solvency,and leading to a gradual decline in the Group’s operational capacity.This is followed by an analysis of the causes of the Storm Group’s strategic risk exposure using ERM’s new framework:first,from the perspective of the strategic risk management framework,the lack of a sound strategic risk management organisational structure,the lack of strategic risk management processes and responsibilities,the lack of professional strategic risk management personnel and the lack of emphasis on building a strategic risk corporate culture;second,from the perspective of strategic risk identification and assessment,the lack of a strategic risk identification and assessment Third,from the perspective of information communication and reporting,the Group’s communication was not timely and the collaboration between various departments was not sufficient;fourth,from the perspective of strategic management monitoring platform and early warning mechanism,the Storm Group lacked a strategic risk monitoring platform,a strategic risk management information system and a strategic risk early warning mechanism.After a more detailed analysis of the causes,this paper proposes the following optimisation strategies based on ERM’s new framework:firstly,in terms of strategic risk governance culture,introducing and training professionals in the strategic risk management coordination line,improving the reward and punishment mechanism,establishing a strategic risk management committee and strengthening the enterprise strategic risk management culture;secondly,in terms of establishing strategic objectives,strengthening the formulation of risk management strategies,defining strategic risk appetite,defining acceptable performance floating intervals;third is to monitor the effect of strategic risk management in terms of monitoring major changes and monitoring ERM;fourth is to strengthen the communication and reporting of strategic risk information,establish an information communication mechanism to fully use all kinds of information,and establish an enterprise strategic risk management information database;fifth is to pay attention to the risks in execution in terms of identifying risks in execution,assessing the execution of risks and form a strategic risk response system.The research in this paper will help the Storm Group to establish and improve strategic risk management,and will help Internet companies to promote the widespread use of the new ERM framework in strategic risk management.