What approach is used to systematically manage all risks to an enterprise?

The correct answer is the approach that encompasses a comprehensive strategy for identifying, assessing, managing, and mitigating risks across an organization, which is known as Enterprise Risk Management (ERM). This approach integrates risk management practices into an organization’s processes, ensuring that all types of risks—including strategic, operational, financial, and compliance risks—are considered in decision-making.

ERM provides a structured framework that aligns risk tolerance with strategic objectives, allowing organizations to proactively manage risks rather than reactively addressing them as they arise. It fosters a culture of risk awareness and establishes clear governance processes to support risk management across all levels of the organization. This holistic perspective on risk ensures that all potential threats are managed in a coordinated manner, thus safeguarding the organization’s assets and ensuring long-term sustainability.

In contrast, while risk assessment is a vital component of ERM, it is just one part of the overall process. Quality management typically focuses on ensuring that products and services meet certain standards and is not directly related to broader risk management. Operational risk control addresses risks associated with internal processes and operations but does not encompass the entire spectrum of enterprise-wide risk management as ERM does.