Financial executive Rao Chalasani most recently served as chief technology officer and risk strategy director with Bank of America-Merrill Lynch in New York City, NY. During his time with the firm, Rao Chalasani invented a US patent pending “Enterprise Risk Management System.”
A strategic business discipline designed to evaluate and manage firmwide risk, enterprise risk management (ERM) also looks at the combined impact of risk in an aggregated risk portfolio.
Unlike more traditional approaches to risk management, ERM looks at the totality of risk rather than individual “silos” of seemingly unrelated risk. As a result, ERM involves all aspects of organizational risk, from compliance and governance to financial and reputational risk.
In practice, ERM collects risk information from internal and external environments, using it to develop structured risk management processes. Because many business leaders see ERM as a way to gain a competitive advantage, risk management often plays a central role in key decisions at all levels of the business organization.