ERM is strategic and forward-looking, while compliance is reactive and rule-based. Combining risk and compliance provides a complete framework to protect the organisation and meet regulatory requirements.
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Enterprise Risk Management vs Compliance: What’s the Difference?
Enterprise Risk Management (ERM)
ERM is a proactive approach to identifying and managing risks that could impact strategy, operations, finance, or reputation. It involves teams across the organisation and strengthens overall resilience.
Key Features
- Proactive risk management
- Alignment with business objectives
- Continuous improvement
Compliance
Compliance ensures adherence to laws, regulations, and internal policies. It prevents breaches and maintains accurate records, supporting regulatory requirements.
Key Features
- Regulatory and legal focus
- Defined procedures and controls
- Preventive and corrective measures
Risk and Compliance: How They Differ
ERM is forward-looking and strategic, while compliance is rule-based and reactive. Together, risk and compliance provide a complete framework to manage organisational threats and regulatory obligations.
Harmonising Both
Integrating ERM and compliance with governance, technology, and training improves decision-making, mitigates risks, and enhances organisational resilience.
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