**2.1. To what extent is ERM a "New" concept?**

In the last years ERM has been gaining momentum as a new concept, a new trend, a MUST HAVE. But perhaps in the midst of everyone rushing-up to implement it, it is worth stopping for a second in order to understand its meaning and ask ourselves … is it really something new?

ERM stands for Enterprise Risk Management but its real origin is unclear. Some associate the birth of this concept to the definition of the Integrated Risk Framework by the Committee of Sponsoring Organizations (COSO) back in September 2004. Others believe that the starting point was in the 1970s when most of the Management theories arised. Being factual it would even be valid the mindset that it is a concept that has been in place since the beginning of times, when the Romans traded goods with the Carthagians. So if we agree that companies have managed risk forever the question here is what can Enterprises do better to manage Risk? Or what have been the best practices in risk management that companies have pursued to achieve recognized success?

Anyone involved in line management makes risk based decisions on a daily basis. The desire of such decision makers would be to count on a reliable crystal ball that would allow them to opt for the choices that would derive profit maximization.

Far from being the aforementioned magic tool, going down the road of ERM involves setting a structured approach or a reference framework to manage risk at companies. As of today, many companies have already understood the value proposition and experienced its benefits – which mainly tackle improved controls, better communications and decisionmaking, and a common language for risks. [7]. Nevertheless, for other companies the concern is still there: is there significant justification for an ERM program? Would the company really make different decisions if it did have an ERM program? According to some literature, a good ERM program has proven to enhance the company value through reduced costs, decreased variability in financial results, enhanced market reputation, and improved business decision-making. Such dimensions can even be measured and what is more, the Credit Rating Agencies have started considering these factors as part of their company assessment process. [8]
