Risk management system in Fedex corporation

Abstract

Organizations are shifting their risk management systems, favouring approaches which are implemented across the enterprise compared with the traditional silo-based methods. Despite growing demands to adopt an Enterprise Risk Management System (ERMS), however, challenges remain in implementation. Research suggests that compartmental approaches of risk management systems must be replaced by ones which are holistic in their assessment and evaluation of the organization’s risks. Existing literature suggests that risk reduction through ERMS can improve both performance and value. This improvement is only possible with managerial support, the formation of relevant committees and the hiring of relevant staff. This study explores the relationship between the successful implementation of an ERMS and a chief risk officer (CRO) being present, a functional audit committee (AC), and supportive top management (TM). This is done through an observational and correlational approach, using a survey instrument provided to self identified FedEx Corporation employees. Using regression and correlation analysis, the findings indicate a significant relationship between a CRO being hired, an extant AC, and supportive TM with successful implementation of ERMS.