---
title: "Enterprise Risk Management"
url: "https://legal.ge/en/service/corporate-and-commercial-law-en/enterprise-risk-management-en"
field: "Corporate & Commercial Law"
description: "Strategic Enterprise Risk Management (ERM) consulting in Georgia. Align risk with strategy. Find experts on Legal.ge."
reviewed: "2026-02-11"
updated: "2026-10-23"
publisher: "legal.ge"
---

# Enterprise Risk Management

> Source: legal.ge, https://legal.ge/en/service/corporate-and-commercial-law-en/enterprise-risk-management-en

**Introduction: What is Enterprise Risk Management (ERM)?**

Enterprise Risk Management (ERM) is a strategic discipline that views risks not as isolated threats but as part of a unified corporate organism. Unlike the traditional approach, where a lawyer assesses only legal risk and a financier only financial risk, ERM integrates all types of risks (strategic, operational, financial, compliance) into a single framework. For medium and large businesses operating in Georgia, implementing an ERM system is vital for long-term sustainability. This involves creating a governance culture where risk consideration is embedded in every major decision, from the Board of Directors down to ordinary employees.

**What Does This Service Cover?**

The ERM service is a high-level consulting service that includes:

-   **Defining Risk Appetite:** Determining, together with the Board of Directors, the level of risk the company is willing to take to achieve strategic goals.
-   **Creating a Governance Framework:** Developing risk management policies and procedures based on international standards (ISO 31000, COSO).
-   **Building a Reporting System:** Ensuring effective flow of risk information from lower levels to management so directors can make informed decisions.
-   **Scenario Planning:** Conducting "What-if" analysis and legally validating Business Continuity Plans (BCP).
-   **Compliance Integration:** Organically merging regulatory requirements with business processes.

**Common Real-World Scenarios**

The need for an ERM system arises at certain stages of a company's development:

-   **IPO (Initial Public Offering):** Investors and exchange regulations require a transparent risk management system.
-   **Holding Governance:** When a group owns companies of different profiles (e.g., hospitality, construction, agro) and a centralized view of risks is needed.
-   **International Partnership:** Foreign banks (EBRD, ADB) require sophisticated corporate governance and risk systems before issuing loans.
-   **Strategic Shift:** A radical change in the business model (e.g., moving from physical sales to digital), creating new systemic risks.
-   **Creating a Supervisory Board:** When a company transitions from family management to a corporate structure, and the board needs risk control tools.

**Georgian Legal Framework**

Enterprise risk management is based on principles of corporate law. The **Law on Entrepreneurs** defines the liability of executives and the "Business Judgment Rule," which protects a director if they acted informedly and based on risk assessment. The **Law on Accounting, Reporting and Auditing** obliges certain categories of enterprises (Public Interest Entities, Category I and II enterprises) to reflect information on main risks and uncertainties in their management reports. For the financial sector, the **Corporate Governance Code** of the National Bank directly requires the existence of a risk management committee.

**Service Process**

Implementing ERM is a long-term process:

1.  **Diagnostics and Culture Assessment:** How ready is the organization for open discussion of risks.
2.  **Design:** Creating an ERM model tailored to the company's size (without excessive bureaucracy).
3.  **Documentation:** Approving risk management policies, bylaws, and reporting forms.
4.  **Training:** Teaching management and key employees how to identify risks.
5.  **Integration:** Incorporating risk management into strategic planning and budgeting processes.

**Why Use Legal.ge?**

Enterprise risk management is not just about creating documents; it is a change in mindset. Legal.ge gives you access to high-level consultants who have experience in both legal and governance matters. Experts on our platform will help you build a system that not only meets regulatory requirements but also increases your business's value in the eyes of investors. Find your strategic partner on Legal.ge.

### Is ERM only for huge corporations?

While critical for large firms, SMEs can benefit from a simplified "ERM Lite" version to align strategy with risks.

### How does ERM add value?

It prevents costly surprises, improves credit ratings, satisfies investors, and helps in making bolder, calculated strategic moves.

### What is "Risk Appetite"?

It's a statement defined by the Board outlining how much risk the company is willing to accept in pursuit of profit.

### Do lawyers handle ERM?

Lawyers handle the governance, compliance, and liability aspects, often working alongside financial risk experts.