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Implementing Enterprise Risk Management in Swedish Corporations: A Study of Incentives and Obstacles

Wendt, Jonas LU and Lindnér, Axel (2013) FEKN90 20131
Department of Business Administration
Abstract
In Sweden, a number of companies have started viewing risk management from a holistic
perspective rather than a silo-based one. This holistic approach is referred to as Enterprise Risk
Management (ERM). Research on ERM has mainly focused on the implementation process and
whether it can be value adding for shareholders. This study is designed to look at why companies
decide to implement ERM and what obstacles are faced in the implementation process. Based on
interviews with CROs of 12 Swedish non-financial firms that explicitly claim to have ERM, we
conclude that regulations on corporate governance and improved investment decision making
are the two main drivers of ERM-implementation. We are also able to identify a set of obstacles
... (More)
In Sweden, a number of companies have started viewing risk management from a holistic
perspective rather than a silo-based one. This holistic approach is referred to as Enterprise Risk
Management (ERM). Research on ERM has mainly focused on the implementation process and
whether it can be value adding for shareholders. This study is designed to look at why companies
decide to implement ERM and what obstacles are faced in the implementation process. Based on
interviews with CROs of 12 Swedish non-financial firms that explicitly claim to have ERM, we
conclude that regulations on corporate governance and improved investment decision making
are the two main drivers of ERM-implementation. We are also able to identify a set of obstacles
including a conflict in who the risk owner is, difficulties to aggregate qualitative and quantitative
risks, inhibited creativity due to ERM and that the character of the implementation is dependent
on the CRO’s background. Further, we suggest that the implementation can be done more
efficient if preceded by a planning and communication phase, and that the implementation
process itself can be value adding by improving internal cooperation and reducing internal
problems. (Less)
Please use this url to cite or link to this publication:
author
Wendt, Jonas LU and Lindnér, Axel
supervisor
organization
course
FEKN90 20131
year
type
H1 - Master's Degree (One Year)
subject
keywords
Enterprise Risk Management (ERM), Risk Management, Implementation, Risk Ownership, Incentives, Obstacles, COSO.
language
English
id
3971827
date added to LUP
2014-05-09 08:04:51
date last changed
2014-05-09 08:04:51
@misc{3971827,
  abstract     = {{In Sweden, a number of companies have started viewing risk management from a holistic
perspective rather than a silo-based one. This holistic approach is referred to as Enterprise Risk
Management (ERM). Research on ERM has mainly focused on the implementation process and
whether it can be value adding for shareholders. This study is designed to look at why companies
decide to implement ERM and what obstacles are faced in the implementation process. Based on
interviews with CROs of 12 Swedish non-financial firms that explicitly claim to have ERM, we
conclude that regulations on corporate governance and improved investment decision making
are the two main drivers of ERM-implementation. We are also able to identify a set of obstacles
including a conflict in who the risk owner is, difficulties to aggregate qualitative and quantitative
risks, inhibited creativity due to ERM and that the character of the implementation is dependent
on the CRO’s background. Further, we suggest that the implementation can be done more
efficient if preceded by a planning and communication phase, and that the implementation
process itself can be value adding by improving internal cooperation and reducing internal
problems.}},
  author       = {{Wendt, Jonas and Lindnér, Axel}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Implementing Enterprise Risk Management in Swedish Corporations: A Study of Incentives and Obstacles}},
  year         = {{2013}},
}