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Enterprise risk management (ERM) is a business strategy designed to discover, evaluate and prepare for any perils, risks and other potential sources for catastrophe - both natural and figurative - that may prevent an organization from achieving its objectives. Enterprise risk management not only requires corporations to describe all the dangers they face and to determine which hazards to handle in an active way, it also requires disclosing that plan of action to all stakeholders, stockholders and possible investors in their annual reports.
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