PHD THESIS OF
IMPLEMENTING EFFECTIVE RISK
(2000) separates uncertainty and risk according to both factors
The existence of uncertainty, complexity and ambiguity in the
business environment promotes the need to establish a dependable
risk governance. The use of Enterprise Risk Management (ERM) has
also been considered as an effective method to attain good risk
governance in order to deal with both upside and downside of
uncertainty and risk. ERM treats all of the risks holistically in order to
achieve organization aims in volatile, normal and crisis situations. This
PhD thesis will discuss issues related to the ERM implementation and
how it has been adapted and implemented in the insurance market of
both India and UK. Mixed methods for research have also been
employed coming from a qualitative stand point in order to explore
research issues, consisting two surveys in both countries, with more
than 50 interviews, as well as two case studies in the country’s
insurance markets. The study revealed that an ambiguity is present
when it comes to understanding all definitions of ERM, as well as the
risks involved across both of the countries.
Background of the Study
In the current environment of business, corporations faced
ambiguity, volatility, and uncertainty. Understanding uncertainty
and risk has posed a number of challenges, and a clear
distinction between uncertainty and risk is not clear. Ramir
as measurability and immeasurability. It also highlights the
impact of individual characteristic involved in the situation in
terms of probability determination. Bernel (1998) also
connected the importance of conditions to uncertainty where
both measurement and rationality are vital to the process of
The currently existing regulations in the financial industry require a
high level of transparency among institutions. Terrorist attacks, cyber-
attacks, as well as increased volatility in the financial markets,
including the bailout of the companies including the American
International Group (AIG), in the recent past, leading companies to
adopt their approaches beyond the Traditional Risk Management
processes. Just recently, ERM has introduced a shift from a separatist
approach, converting to an integrated approach in order to include
both risks in a holistic way, considering them as a way to implement
effective risk governance in the field of financial industry.
Recent financial issues have further raised concerns for exigency in
order to deal with the challenges in a holistic way. The financial
markets have also become more volatile, which means that the
companies has to prepare accordingly in order to deal with such
crisis and volatile situations. The adoption of a higher standard of risk
governance through ERM practices may offer plausible assurance to
companies starting from the downside of challenges and risks,
though the implementation will not be easy (Charter & Pucer, 2007).
By adopting the Institutional Theory, the study will offer comparative
highlights on the specific aspects of ERM that is needed to
understand risk governance completely. Unfortunately, a wide
ambiguity involved in the understanding of ERM surfaced. The
corporates are struggling in terms of the definition of ERM, including
its goals and scope. Some definitions have also been proposed,
without any requirements of standardization. As such, corporates
cannot find the right strategies which can deal with uncertainties and
risks in order to enhance risk governance.
Future research covering the jurisdiction at a local, industry, as well
as international level would be enough basis for worthwhile effort.
The understanding of the concept of ERM needs the completion of
more case studies which will help in understanding the institutional
change, as well as its impact on strategies. There would be
advantages that can be expected from presenting an international
comparative study that compares ERM practices of local partnership
and joint venture partnerships between India and the UK.
Bernel, G. (1998). The rise and introduction of the Chief Risk Officer:
risk management at enterprise level. Applied Corporate Finance
Journal, 12(3), 45-67.
Charter, G. & Pucer, G. (2007). Investigating the evolution of
enterprise risk management in the insurance sector. Risk and
Insurance Reports, 2(1), 23-34.
Ramir, G. (2000). The relevance of disclosing risk factors in corporate
yearly reports. UK Accounting Review, 34(2), 45-56.