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An Enterprise Risk Management Framework helps Saudi organizations identify, assess, and control potential threats to their business. It maps out how companies handle everything from market fluctuations and cybersecurity issues to compliance with Kingdom regulations like the Saudi Companies Law and Capital Market Authority requirements.

The framework guides organizations through risk evaluation, setting risk tolerance levels, and creating response strategies. It brings together policies, procedures, and reporting systems that help boards and management teams make informed decisions while staying aligned with Shariah principles and local governance standards. Companies use it to protect their assets, maintain stakeholder trust, and ensure business continuity.

Your organization needs an Enterprise Risk Management Framework when expanding operations, entering new markets, or facing increased regulatory scrutiny in Saudi Arabia. It's particularly crucial during major organizational changes, like mergers, new product launches, or when adapting to updated Capital Market Authority regulations or Shariah compliance requirements.

The framework becomes essential when coordinating risk responses across multiple departments, managing complex supplier relationships, or dealing with emerging cybersecurity threats. Saudi companies often implement it during strategic planning cycles, when seeking additional funding, or after experiencing significant operational incidents that highlight gaps in risk oversight.

• Strategic Risk Frameworks: Focus on high-level business risks and align with Saudi Vision 2030 objectives, commonly used by large corporations and government entities
• Operational Risk Frameworks: Detail day-to-day risk management processes, including Shariah-compliant financial controls and CMA compliance measures
• Industry-Specific Frameworks: Tailored for sectors like banking, petrochemicals, or healthcare, addressing unique regulatory requirements and sector risks
• Integrated Frameworks: Combine multiple risk types and compliance requirements, suitable for complex organizations operating across various Saudi business sectors

• Board of Directors: Approve and oversee the Enterprise Risk Management Framework, ensuring alignment with strategic objectives and Saudi governance requirements
• Risk Management Committee: Develops and maintains the framework, monitors implementation, and reports to the board on risk status
• Compliance Officers: Ensure the framework meets CMA regulations, Shariah principles, and other Saudi regulatory requirements
• Department Managers: Implement framework procedures within their units and report risks to senior management
• Internal Auditors: Evaluate framework effectiveness and provide independent assurance to stakeholders

• Risk Assessment: Document all potential risks across operations, market conditions, and regulatory requirements specific to Saudi business environment
• Stakeholder Input: Gather insights from department heads, compliance officers, and key personnel about risk exposure and control measures
• Regulatory Review: Compile relevant CMA regulations, Shariah requirements, and industry-specific compliance standards
• Control Mapping: List existing risk controls, identifying gaps and areas needing enhancement
• Documentation Structure: Organize framework sections including risk appetite, governance structure, and reporting mechanisms

• Risk Governance Structure: Clear definition of roles, responsibilities, and reporting lines aligned with Saudi Companies Law
• Risk Assessment Methodology: Detailed processes for identifying, measuring, and prioritizing risks per CMA guidelines
• Control Mechanisms: Specific risk mitigation strategies and controls meeting Shariah compliance requirements
• Reporting Framework: Mandatory disclosure requirements and escalation procedures following Saudi regulatory standards
• Review and Update Procedures: Documentation of framework maintenance, audit requirements, and periodic assessment schedules

An Enterprise Risk Management Framework differs significantly from a Risk Management Policy in both scope and application within Saudi organizations. While they're often confused, understanding their distinct roles helps ensure proper risk governance.

• Scope and Structure: The framework provides the comprehensive architecture for managing all organizational risks, while the policy outlines specific rules and procedures for handling individual risk categories
• Implementation Level: The framework operates at a strategic level, coordinating multiple policies and procedures across departments, whereas the policy functions at an operational level with specific guidelines
• Regulatory Alignment: The framework must align with broader Saudi regulatory requirements and CMA guidelines, while policies focus on specific compliance areas
• Review Cycle: Frameworks typically undergo comprehensive reviews annually or during major organizational changes, while policies may be updated more frequently to address immediate risks