The COSO ERM framework: a critique from systems theory of management control
by Dermot Williamson
International Journal of Risk Assessment and Management (IJRAM), Vol. 7, No. 8, 2007

Abstract: COSO's (2004) framework on Enterprise Risk Management (ERM) makes a valuable contribution to the emerging practice of ERM, but suffers serious limitations. It fails to provide a workable standard for identifying ERM effectiveness. Its definition of 'risk' diverts attention from opportunities and from uncertainties that fall outside its closed rational systems perspective. By taking a command and control approach, it ignores shared management of uncertainties with external parties and social implications of ERM. As a result, threats will be created if this framework is widely followed, which seems likely as ERM is institutionalised within regulations, professional practice and expected norms of good management.

Online publication date: Tue, 02-Oct-2007

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