Enterprise Risk Management (ERM) is increasingly claimed as a tool for improving the capability of companies in predicting and managing risks, enhancing planning and the achievement of their goals. This research argues that the managerial role of ERM and its link with budgeting is both a strategic and a management challenge for companies.

ERM may be considered the culmination of the risk management explosion (Power, 2007) which started during the 1990s. ERM is intended to be a holistic approach for assessing and evaluating the risks that an organisation faces (COSO, 2004). Interest in ERM has grown rapidly in the past 15 years and after recent financial scandals, there has been further pressure from various parties to adopt and embed ERM in business processes. In the UK, the publication and review of the Turnbull Report signalled a close coupling between internal control and risk management, making ERM a central focus of corporate governance.