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Glossary · ERM

Risk Management Framework

A structured approach defining how an organization identifies, assesses, treats, monitors, and reports risks across all business functions.

Full definition
A risk management framework provides the foundation, organizational arrangements, and systematic processes for managing risk throughout an enterprise. It establishes governance structures, risk appetite statements, roles and responsibilities, policies, methodologies, and reporting mechanisms. The framework ensures consistent risk practices aligned with strategic objectives and regulatory requirements. For example, a multinational bank implements a comprehensive framework integrating credit, market, operational, and compliance risks with board-level oversight committees and quarterly risk reporting to regulators.
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