Comprehensive Integrated Risk Management Solutions are available for all the world's standards!

Our risk assessment modules all participate in auto-mapping to the global compliance frameworks, saving you time and trouble. Even better, our real-time scoring, reporting, and dashboards help you stay current and compliant.

Build your own risk module easily, or use our preconfigured inventory covering:

COSO Enterprise Risk Management Integrated Framework

​​​The framework defines essential enterprise risk management components, discusses key ERM principles and concepts, suggests a common ERM language, and provides clear direction and guidance for enterprise risk management.

Internal Audit and Financial Controls Management helps drive an agile and risk-based internal audit and financial controls management program that is aligned with your overarching risk management framework and business strategy. Continuum GRC allows you to seamlessly adopt established industry standards, frameworks, and best practices to simplify associated processes, enhance productivity, and facilitate better collaboration across teams. Streamline the processes for end-to-end audit management; from audit planning to execution, review, and analysis of audit findings, creation of the final audit report, and more, as well as SOX surveys and certifications. Powerful analytics and reporting tools and graphical dashboards provide real-time insights into audit findings, the status of controls, and SOX compliance, helping you make informed decisions and protecting your organization from risks.

Modules include:

  • COSO ERM

Integrating with Strategy and Performance

Managing risk doesn’t happen in a vacuum. It’s a process that should be practiced each day, through systems and processes that seamlessly integrate into your organization. Enterprise Risk Management (ERM) is a framework that covers all aspects of risk management, from meeting regulations to employee safety, data security, and even avoiding fraudulent financial reporting.

The ERM Integrated Framework was established by COSO to provide a structured approach to managing risk across the board. The five key components include corporate governance, strategy, performance, review/revision, and communication/reporting. Integrating the COSO ERM Framework simplifies the process of managing risk.

FAQ

Yes.

The COSO ERM framework provides a comprehensive approach to managing risk that helps organizations easily implement smart strategies into their operations, planning and objectives. By embedding risk management into core business processes, it’s easier to identify and mitigate potential problems. This can lead to better decision making and performance.

Continuum GRC is deeply experienced in all aspects of risk management and what’s required to achieve related security certifications. We’ll guide you through the various assessments, prioritizing risks, and helping with mitigation strategies. We’ll assist in the required monitoring, documentation, and reporting to help yo operate in an integrated way.

Yes. The ERM framework is designed to provide a broad framework for organizations, whether they be public or private, to manage risks and uncertainties in their business operations. While many public sector organizations use this Enterprise Risk Management process, private companies find it useful, especially in the financial sector.

Implementing COSO Enterprise Risk Management practices makes it much simpler for organizations to work smart risk management practices into ongoing decision making and planning.  It streamlines regulatory compliance, increases efficiency and trust among stakeholders. Awareness of potential vulnerabilities also helps with planning for business continuity and allocating resources.

The COSO ERM Framework is designed to embed smart risk management strategies into the key aspects of culture and operations within an organization. It’s flexible and scaleable, so it can seamlessly integrate into current management practices. The framework gives a structured approach to identifying potential risks and vulnerabilities and proactively responding.

What are you waiting for?

You are just a conversation away from putting the power of Continuum GRC to work for you. 

Contact us using the form below or calling us at 1-888-896-6207 for immediate assistance.

Download our company brochure.

About the Standard

The COSO Enterprise Risk Management (ERM) Integrated Framework, updated in 2017, is not a regulatory mandate but a voluntary framework organizations can adopt to enhance risk management practices. Compliance requirements depend on the organization's industry, jurisdiction, and whether it chooses to align with COSO ERM for governance, regulatory, or stakeholder purposes. Below, I outline the key components and principles of the COSO ERM Framework, how they translate into compliance considerations, and practical steps for implementation. Since the framework itself is not legally binding, "compliance" refers to adhering to its principles for effective risk management or meeting related regulatory expectations.

Overview of the COSO ERM Framework

The COSO ERM Framework, titled Enterprise Risk Management—Integrating with Strategy and Performance, provides a structured approach to managing risks across an organization. It consists of five components and 20 principles that guide organizations in integrating risk management with strategy and performance. These components are:

  1. Governance and Culture
  2. Strategy and Objective-Setting
  3. Performance
  4. Review and Revision
  5. Information, Communication, and Reporting

Compliance Requirements and Considerations

Since COSO ERM is not a law, compliance involves aligning with its principles to meet organizational goals, stakeholder expectations, or specific regulatory requirements (e.g., Sarbanes-Oxley Act for U.S. public companies, ISO 31000, or industry-specific standards). Below are the key compliance-related aspects for each component, including how organizations can apply the 20 principles:

1. Governance and Culture

Principles (1–5):

  • Exercises board risk oversight.
  • Establishes operating structures.
  • Defines desired culture.
  • Demonstrates commitment to core values.
  • Attracts, develops, and retains capable individuals.

Compliance Requirements:

  • Board Oversight: Ensure the board or a designated risk committee actively oversees risk management, which may be required by regulations like Sarbanes-Oxley (SOX) Section 301 for public companies, mandating audit committee oversight of risk.
  • Culture and Ethics: Embed a risk-aware culture through policies, codes of conduct, and training. For example, financial institutions under Dodd-Frank or Basel III may need to demonstrate a culture that supports risk management to regulators.
  • Talent Management: Maintain processes to recruit and train personnel competent in risk management, which may align with industry standards like ISO 27001 for cybersecurity.

Practical Steps:

  • Document board risk oversight in meeting minutes.
  • Develop a code of conduct and risk management policies.
  • Conduct regular employee training on risk awareness.

2. Strategy and Objective-Setting

Principles (6–9):

  • Analyzes business context.
  • Defines risk appetite.
  • Evaluates alternative strategies.
  • Formulates business objectives.

Compliance Requirements:

  • Risk Appetite: Define and document risk appetite statements aligned with strategic goals. This is critical for regulated industries (e.g., banking, insurance) where regulators like the SEC or Federal Reserve may expect clear risk tolerances.
  • Strategy Integration: Ensure risk management is integrated into strategic planning, which may be scrutinized in audits or by stakeholders like investors or rating agencies.
  • Context Analysis: Assess external and internal factors (e.g., market conditions, regulatory changes) to ensure strategies are resilient, aligning with standards like ISO 31000.

Practical Steps:

  • Create a risk appetite statement approved by the board.
  • Conduct scenario planning and stress testing for strategic decisions.
  • Align objectives with regulatory requirements (e.g., GDPR for data privacy in the EU).

3. Performance

Principles (10–14):

  • Identifies risk.
  • Assesses the severity of risk.
  • Prioritizes risks.
  • Implements risk responses.
  • Develops portfolio view.

Compliance Requirements:

  • Risk Identification and Assessment: Systematically identify and assess risks (e.g., operational, financial, cyber) to meet regulatory expectations, such as SOX Section 404 for internal controls over financial reporting or NIST 800-53 for cybersecurity.
  • Risk Prioritization and Response: Prioritize risks based on likelihood and impact, and implement controls or mitigation strategies. For example, HIPAA requires risk assessments and mitigation plans for healthcare organizations.
  • Portfolio View: Maintain an enterprise-wide view of risks, which is often expected by regulators or auditors to ensure no significant risks are overlooked.

Practical Steps:

  • Use risk registers to document identified risks and assessments.
  • Implement controls (e.g., IT security measures, financial controls) and test their effectiveness.
  • Aggregate risks into a portfolio view for board reporting.

4. Review and Revision

Principles (15–17):

  • Assesses substantial change.
  • Reviews risk and performance.
  • Pursues improvement in ERM.

Compliance Requirements:

  • Continuous Monitoring: Regularly review risk management processes to adapt to changes (e.g., new regulations, market shifts). This aligns with requirements like COSO’s Internal Control Framework, often used for SOX compliance.
  • Performance Review: Evaluate how risk management impacts performance, which may be required in audits or regulatory filings (e.g., SEC 10-K disclosures on risk factors).
  • Continuous Improvement: Update ERM processes to address gaps, aligning with standards like ISO 31000’s emphasis on continual improvement.

Practical Steps:

  • Conduct periodic risk assessments (e.g., annually or after major changes).
  • Perform internal audits of ERM processes.
  • Document improvements in risk management practices.

5. Information, Communication, and Reporting

Principles (18–20):

  • Leverages information and technology.
  • Communicates risk information.
  • Reports on risk, culture, and performance.

Compliance Requirements:

  • Data and Technology: Use technology to collect and analyze risk data, ensuring compliance with regulations like GDPR or CCPA for data protection.
  • Communication: Ensure clear, timely communication of risk information to stakeholders, which may be required by governance standards or regulations like SOX Section 302 (management certifications).
  • Reporting: Provide accurate, transparent risk reports to boards, regulators, or stakeholders. For example, public companies must disclose material risks in SEC filings.

Practical Steps:

  • Implement risk management software for data aggregation and reporting.
  • Establish communication protocols for escalating risks.
  • Prepare regular risk reports for the board and external stakeholders.

Regulatory and Industry Context

While the COSO ERM Framework itself is not mandatory, it is widely recognized and often used to demonstrate compliance with related regulations or standards, such as:

  • Sarbanes-Oxley Act (SOX): U.S. public companies use COSO ERM alongside the COSO Internal Control Framework to comply with Sections 302 and 404, focusing on financial reporting risks.
  • ISO 31000: COSO ERM aligns with ISO 31000’s risk management principles, often used in international or industry-specific contexts.
  • Industry Regulations: Sectors like finance (Basel III, Dodd-Frank), healthcare (HIPAA), or cybersecurity (NIST, ISO 27001) may require risk management practices that COSO ERM can help fulfill.
  • Corporate Governance: Stock exchanges (e.g., NYSE, NASDAQ) or governance codes (e.g., UK Corporate Governance Code) may expect robust risk management aligned with frameworks like COSO.

Practical Implementation for Compliance

To align with the COSO ERM Framework and meet related compliance needs:

  1. Adopt the Framework: Formally adopt COSO ERM through board approval and integrate it into governance policies.
  2. Assign Responsibilities: Designate a Chief Risk Officer (CRO) or risk management team to oversee implementation.
  3. Document Processes: Create policies, procedures, and documentation for each of the 20 principles, ensuring auditability.
  4. Train Staff: Educate employees and leadership on ERM principles and their roles in risk management.
  5. Leverage Technology: Use ERM software (e.g., LogicGate, Riskonnect) to manage risks and generate reports.
  6. Engage Auditors: Work with internal or external auditors to verify alignment with COSO ERM and regulatory requirements.
  7. Monitor and Update: Regularly review and update ERM practices to reflect changes in risks, regulations, or business strategy.

Key Considerations

  • Voluntary Nature: COSO ERM is not legally required, but its adoption can enhance compliance with mandatory regulations or improve stakeholder trust.
  • Scalability: The framework is flexible and can be tailored to organizations of all sizes and industries.
  • Integration with COSO Internal Control: Many organizations use COSO ERM alongside the COSO Internal Control Framework for a holistic approach to governance and compliance.
  • Stakeholder Expectations: Investors, regulators, and rating agencies often view COSO ERM adoption as a sign of robust risk management.

Resources for Compliance

  • COSO Guidance: Obtain the Enterprise Risk Management—Integrating with Strategy and Performance (2017) from the COSO website (www.coso.org) for detailed guidance.
  • Regulatory Alignment: Map COSO principles to specific regulations (e.g., SOX, GDPR, HIPAA) with the help of legal or compliance teams.
  • Professional Support: Engage consultants or auditors familiar with COSO ERM to ensure proper implementation.