Value is central to enterprise risk management, as it is to its constiutent parts: decision making, risk management, and opportunity management. Measuring value has historically been a challenge because it is in part objective and part subjective. However, it is possible and practical to obtain mathematically meaningful measures of subjectivity using pairwise comparisons as practiced in the Analytic Hierarchy Process. (See deriving ratio scale measures with pairwise comparisons for a demonstration of how this is done.)

Enterprise risk management starts with an organization’s mission, vision, goals and objectives as expressed in the organization’s strategic plan.

Decision making involves making a choice of one or more ALTERNATIVES that best contribute to the organization’s objectives.

Risk and opportunity management involve identifying, measuring, and controlling uncertain EVENTS that result in losses or gain to the organization’s objectives respectively.