By definition and contrast, ERM is seen as the new paradigm in risk management; while the old paradigm in characterized by avoiding losses within a limited scope, separated by function, and terminates at the end of the task (or project), this new approach covers all risks, both internal and external, integrates and views all risks from a board, creating awareness organisation-wide, with the goal of creating, protecting, and enhancing shareholder value by mitigating risks and seizing opportunities in a continuous process.
The authorities and expert of this emerging discipline have defined ERM in a number of ways that depicts their perception and way they practice it.
The CAS committee definition is started below:
"ERM is the discipline, by which an organisation in any industry assesses, controls, exploit , finances, and monitors risk from all sources for the purpose of increasing the organisation short and long term value to its stakeholders"
The committee places emphasis on the following five parts of the definition
1. ERM is a discipline
2. ERM applies to all industry
3. ERM exploits (value creasing) as well as mitigate (manage) risk
4. ERM consider all sources of risks
5. ERM consider all stakeholders of the enterprise