|Busi*ness In*tel”li*gence|, n. - the capacity to acquire and apply business knowledge, the act or state of knowing about your business; to understand and profit from experience; the internal development and sharing of information to create a competitive advantage.
When initiating the project to update its ERM framework, COSO saw opportunities to achieve clarity on several fronts. The updated framework recognizes the increasing importance of the interconnection of risk, strategy and enterprise performance – particularly in conjunction with making important decisions. It begins with an underlying premise that every entity exists to provide value to its stakeholders and faces uncertainty in the pursuit of that value. Therefore, the framework itself focuses on preserving and creating enterprise value, with an emphasis on managing risk within the entity’s risk appetite. The term “uncertainty” is defined as not knowing how or if potential events may manifest themselves in the context of achieving future strategies and business objectives. “Risk” is considered the effect of such uncertainty in the formulation and execution of the business strategy and the achievement of business objectives.
Topics: Enterprise Risk Management
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