Enterprise Risk Management (ERM) is the process by which threats to and opportunities for an organization are identified, evaluated, and integrated across all disciplines in order to determine how to exploit opportunities, and mitigate, transfer, or avoid threats. Airports are conducting risk management activities, but they often aren’t being coordinated on an enterprise level so that information gleaned through the process can be used in the strategic planning process, the decision-making process, and the allocation of limited resources. Other industries have implemented ERM and realized many benefits. From these experiences there are many lessons learned that can be applied at airports. ERM is not a one-time process that produces a report for the CEO or the executive management team, but rather a paradigm shift in the entire operation of an airport. Research is needed to help airport CEOs understand ERM, how it can be applied, and how to put it into practice.
The objectives of this research are to develop (1) a guidebook for airport CEOs and their executive team on the application of enterprise risk management (ERM) to airports and (2) an electronic tool that can be used to prepare a risk classifications matrix. The guidebook should (a) define ERM; (b) examine the benefits, costs, and risks of implementation; (c) describe the process to implement ERM; (d) describe how the ERM process integrates with an organizational strategic planning process; and (e) describe how the information gathered through the ERM process can be used in airport organization’s decision-making process. The guidebook should include forms and worksheets that can be used to implement ERM at airports.
This has been published as ACRP Report 74: Application of Enterprise Risk Management at Airports