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An Enterprise Risk Management Framework helps Indonesian organizations identify, assess, and handle business risks systematically. It aligns with OJK regulations and provides a structured approach for managing everything from financial and operational risks to compliance with local banking laws and capital market requirements.

This framework serves as a practical roadmap for boards and management teams to protect their organizations while pursuing growth opportunities. It includes clear processes for risk reporting, control mechanisms, and response strategies - all tailored to meet Indonesia's regulatory environment and governance standards under POJK requirements.

Organizations need an Enterprise Risk Management Framework when expanding operations, entering new markets, or facing increased regulatory scrutiny in Indonesia. It's particularly crucial for financial institutions meeting OJK requirements, companies preparing for IPOs, or businesses managing complex supply chains across multiple provinces.

The framework becomes essential during major organizational changes, mergers and acquisitions, or when implementing new technology systems. It helps leadership teams spot potential threats early, satisfy regulatory compliance requirements, and make better-informed decisions about resource allocation and strategic planning under Indonesia's evolving business landscape.

• Traditional Financial Risk Framework: Focuses on credit, market, and liquidity risks, commonly used by Indonesian banks and financial institutions under OJK supervision
• Operational Risk Framework: Addresses day-to-day business risks, IT systems, and internal processes, popular among manufacturing and service companies
• Integrated Corporate Framework: Combines strategic, compliance, and reputational risk management, suited for large Indonesian conglomerates
• Project-Based Framework: Tailored for construction, infrastructure, and development projects, emphasizing timeline and budget risks
• Supply Chain Risk Framework: Specifically designed for companies managing complex logistics and international trade relationships

• Board of Directors: Approves and oversees the Enterprise Risk Management Framework, ensuring alignment with corporate strategy and risk appetite
• Risk Management Committee: Develops and maintains the framework, monitors implementation, and reports to the board on risk status
• Internal Audit Teams: Evaluates framework effectiveness and compliance with OJK regulations and internal controls
• Department Heads: Implement risk management practices within their units and report identified risks
• Compliance Officers: Ensure the framework meets Indonesian regulatory requirements and industry standards
• External Auditors: Review and validate the framework's effectiveness during annual audits

• Risk Assessment: Document all potential risks across operations, finance, compliance, and strategic areas specific to your Indonesian business context
• Regulatory Review: Gather current OJK regulations, industry-specific requirements, and relevant Indonesian laws affecting your organization
• Stakeholder Input: Collect feedback from department heads, risk committee members, and key personnel about operational challenges
• Control Analysis: Map existing internal controls and identify gaps in risk management processes
• Resource Evaluation: Assess available technology, staff capabilities, and budget for framework implementation
• Documentation Structure: Outline reporting templates, escalation procedures, and monitoring mechanisms

• Framework Scope: Clear definition of covered business activities, subsidiaries, and risk categories aligned with OJK guidelines
• Governance Structure: Detailed roles and responsibilities of board, committees, and management in risk oversight
• Risk Assessment Methods: Standardized processes for identifying, measuring, and prioritizing risks under Indonesian regulations
• Control Mechanisms: Specific internal controls, monitoring procedures, and corrective action protocols
• Reporting Requirements: Regular reporting schedules, formats, and escalation procedures meeting OJK standards
• Review Process: Annual framework evaluation and update procedures aligned with changing regulations

While both serve risk management purposes, an Enterprise Risk Management Framework differs significantly from a Risk Management Policy. Let's explore their key distinctions:

• Scope and Structure: The Framework provides a comprehensive organizational blueprint for managing all risk types, while the Policy outlines specific rules and procedures for handling individual risks
• Implementation Level: The Framework operates at a strategic level, guiding overall risk governance across the organization, whereas the Policy functions at an operational level with detailed procedures
• Regulatory Alignment: Under OJK requirements, the Framework must demonstrate enterprise-wide risk integration, while Policies can focus on specific risk areas or departments
• Review Cycle: Frameworks typically undergo annual strategic reviews with board oversight, while Policies may be updated more frequently to address immediate operational needs
• Documentation Requirements: The Framework requires extensive supporting documentation including risk matrices and governance structures, while Policies focus on specific procedural guidelines