Principal object : the alignment of risk, strategy, and performance.
Illustration : introduced an update to the “COSO cube,”
Changes that reflect the evolution of thinking and practices related to enterprise risk management (ERM) are among the most significant updates proposed to a new integrated framework devoted to ERM. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) will issue an exposure draft Wednesday and seeks public comment. The update, Enterprise Risk Management—Aligning Risk With Strategy and Performance, provides additional clarity on concepts introduced in the 2004 framework. Those updates are in response to growing complexity and speed of risk over the past decade. “Risk cannot be viewed as a potential constraint or challenge to executing a strategy,” COSO Chairman Robert Hirth said in a news release. “Rather, how an organization copes with risk offers strategic opportunities. This update answers the call for improved culture, capabilities, and practices integrated with strategy setting and its execution.”
The updated framework proposes: