ERM is an Integrative Approach to Risk Management

Risk management as traditionally practiced in organisations, tended to be silo-based.  Risks originating from one area is expected to be managed in that area which is assigned the responsibility for managing, while risks originating from another area is managed by that area. 

One reason Chapman gives as to why this approach developed is our tendency to compartmentalise. Our analytical mindset approach to problem solving leads us to split things into their basic components, to make them easier to manage. 

Over the years, there have been growing recognition that the silo-based approach is flawed.  The impact of risks span across silos -- a breakdown in manufacturing leads to impacts well beyond the manufacturing department.  Mismanagement of risk in one silo affects other silos, which may not be prepared for that risk because they had assumed that other area was managing that risk.  

ERM is a new approach to managing risk.  The thrust is of ERM is the integrative management of risks, understanding the interdependencies, their impacts, and areas where they can be leveraged so that addressing a single cause can prevent multiple risks.

Reference: Chapman, Robert. Simple Tools and Techniques for Enterprise Risk Management 2006.