��������Ƶ

An Enterprise Risk Management Framework guides how organizations identify, assess, and handle potential threats to their business. In Canada, these frameworks help companies meet requirements under securities regulations and corporate governance guidelines from bodies like the OSC and CSA.

The framework creates a systematic way to spot risks early, from market fluctuations to cyber threats, and sets clear steps for managing them. It connects risk management to business strategy, helping boards and executives make better decisions while protecting stakeholder interests. Many Canadian organizations build their frameworks to align with standards like ISO 31000 or COSO ERM.

Put an Enterprise Risk Management Framework in place when your organization faces complex risks that need coordinated oversight. This commonly happens during rapid growth, when entering new markets, or after experiencing significant losses. Canadian financial institutions and publicly traded companies must implement these frameworks to satisfy regulatory requirements from OSFI and securities regulators.

The framework becomes essential before major strategic changes, mergers, or when expanding operations internationally. It helps boards demonstrate due diligence in risk oversight, protects against legal liability, and provides clear protocols for responding to emerging threats. Many organizations adopt frameworks during annual planning cycles to align risk management with business objectives.

• Basic Framework: Follows standard risk identification and assessment protocols, suitable for small to medium businesses just starting their risk management journey
• Comprehensive COSO-aligned Framework: Incorporates all elements of the COSO cube, typically used by large corporations and financial institutions under OSFI oversight
• Industry-Specific Framework: Tailored to sector challenges, like cybersecurity for tech companies or environmental risks for resource firms
• Integrated GRC Framework: Combines risk management with governance and compliance, popular among regulated entities
• Project-Based Framework: Focuses on managing risks for specific initiatives or transformational programs

• Board of Directors: Approve and oversee the Enterprise Risk Management Framework, ensuring it aligns with corporate strategy and risk appetite
• Risk Management Committee: Develops and maintains the framework, monitors implementation, and reports to the board
• Chief Risk Officer: Leads framework implementation, coordinates risk assessment activities, and ensures compliance with regulatory requirements
• Department Managers: Apply framework principles in daily operations, identify risks, and implement controls
• Internal Auditors: Evaluate framework effectiveness and provide independent assurance to stakeholders
• External Regulators: Review framework compliance, particularly OSFI for financial institutions and securities regulators for public companies

• Risk Assessment: Document current and potential risks across all business units, including financial, operational, and strategic threats
• Regulatory Review: Compile applicable Canadian regulations, especially OSFI guidelines and securities requirements for your industry
• Stakeholder Input: Gather feedback from department heads, risk managers, and board members about risk tolerance and control measures
• Resource Evaluation: Assess available tools, personnel, and systems for implementing risk management processes
• Current Policies: Review existing risk policies and procedures to ensure alignment with the new framework
• Implementation Plan: Develop training schedules, communication strategies, and monitoring mechanisms

• Governance Structure: Clear outline of roles, responsibilities, and reporting lines for risk management oversight
• Risk Appetite Statement: Detailed parameters for acceptable risk levels across different business activities
• Risk Assessment Process: Methodology for identifying, measuring, and prioritizing risks
• Control Mechanisms: Specific procedures and tools for risk mitigation and monitoring
• Reporting Requirements: Frequency and format of risk reporting to board and management
• Review and Update Process: Schedule and procedures for framework evaluation and revision
• Compliance Protocols: Alignment with Canadian regulatory requirements and industry standards

An Enterprise Risk Management Framework differs significantly from a Risk Management Policy. While they're often confused, understanding their distinct roles helps organizations implement effective risk management.

• Scope and Structure: The framework provides the overarching architecture for managing risk across an organization, while a policy outlines specific rules and procedures for handling individual risks
• Hierarchical Position: The framework guides the development of multiple policies and procedures, serving as the foundation for all risk-related documents
• Implementation Level: Frameworks operate at a strategic level, establishing principles and approaches, while policies work at an operational level with detailed instructions
• Review Cycle: Frameworks typically undergo less frequent updates, focusing on structural changes, while policies require regular updates to address emerging risks and regulatory changes
• Regulatory Context: Canadian regulators often require frameworks for governance oversight, while policies demonstrate day-to-day compliance