Enterprise Risk Management (ERM) provides a framework for what?

Enterprise Risk Management (ERM) indeed provides a framework for assessing risk for frequency and severity. This concept is central to ERM as it involves identifying, analyzing, and evaluating the potential risks that an organization may face across its various operations. By understanding frequency—the likelihood of a risk event occurring—and severity—the potential impact or consequences of that risk—organizations can develop strategies to manage and mitigate those risks effectively.

The framework enables organizations to adopt a holistic approach to risk management, ensuring that risk assessment is integrated into decision-making processes. This comprehensive assessment helps organizations to anticipate potential challenges and prepare accordingly, thereby protecting assets, ensuring compliance, and ultimately supporting long-term objectives.

The other choices, while important parts of an organization’s overall strategy, do not accurately reflect the primary purpose of ERM. For instance, identifying profitable investments focuses on financial analysis rather than risk assessment. Minimizing employee turnover relates to human resource management and is not directly tied to the risk assessment framework that ERM provides. Enhancing corporate governance, although related to ensuring accountability and transparency in organizational operations, does not specifically capture the risk assessment scope integral to ERM. Hence, option B stands out as the most fitting choice that aligns with the core principles of Enterprise Risk Management.