Common Risk Categories in Enterprise Risk Management (ERM)
Strategic Risks
These are risks that arise from an organization鈥檚 business strategy and objectives. For example, entering a new market or launching a new product may have strategic risks associated with them.
Operational Risks
These are risks that arise from an organization鈥檚 day-to-day activities and processes. Examples include technology failures, employee errors聽or supply chain disruptions.
Financial Risks
These are risks that arise from an organization鈥檚 financial operations and management. Examples include credit risk, market risk聽and liquidity risk.
Legal/Compliance Risks
These are risks that arise from an organization鈥檚 failure to comply with laws, regulations or industry standards. Examples include contract disputes, intellectual property disputes, employment law violations, data privacy violations or noncompliance with environmental regulations.
Reputational Risks
These are risks that arise from damage to an organization鈥檚 reputation, image or brand. Examples include product recalls, lawsuits聽or negative media coverage.