Integrating Cyber Risk into ERM: A Guide for Leaders

Integrating Cyber Risk into ERM: A Guide for Leaders
October 10, 2025 6 mins

Integrating Cyber Risk into ERM: A Guide for Leaders

Integrating Cyber into Enterprise Risk Management: What Leaders Need to Know

Cyber risk is no longer a siloed IT issue—it’s a boardroom priority. As digital transformation accelerates, cyber threats have become pervasive, complex, and deeply intertwined with enterprise value.

Key Takeaways
  1. Understanding and managing cyber risk is not limited to an organization’s chief information officer or IT director. The process should involve key stakeholders from risk management, operations, compliance, and third-party management to effectively leverage best practices.
  2. Enterprise Risk Management (ERM) and cyber risk management frameworks are naturally aligned. Established frameworks exist for each and the overlap between them underscores the need for a holistic approach.
  3. The impacts of cyber risks are pervasive. An integrated approach to managing them while considering other risks can help lessen the impact across multiple areas.

Encouraging cross-functional collaboration to understand and manage cyber risk fosters a strong risk management culture, improves information sharing, strengthens cyber practices, and enables more efficient capital deployment. This is especially important considering the rise in the adoption of artificial intelligence (AI) which is helping organizations innovate and grow but also raises new potential vulnerabilities.

As organizations establish their understanding of cyber risk, the conversation is shifting from why to integrate it into enterprise risk management (ERM) to how to do it effectively.

Cyber Risk: A Core ERM Priority

Cyber risk belongs in ERM because it is one of the most critical and complex risks organizations face today. An effective ERM program is essential for sustaining operational, financial, and strategic success—and cyber risk poses a threat to the achievement of all three. Cyber consistently ranks at the top of enterprise risk registers, as confirmed by Aon’s 2025 Global Risk Management Survey findings. In response, many organizations have developed comprehensive cyber security frameworks that include:

  • Cyber risk assessment
  • Defined standards and best practices
  • Financial quantification
  • Risk reporting
  • Incident response planning
  • Training

Integrating cyber into ERM amplifies the effectiveness of both. Many of the practices of ERM and cyber risk management overlap, and cross-leveraging them ensures cyber risk is addressed alongside other enterprise risks such as business interruption or supply chain risk. This is especially important as risks increasingly intersect. A cross-functional, enterprise-wide view helps prioritize resources, improve decision making, and strengthen overall resilience.

Strengthening your ERM program with cyber risk management practices:
Successful ERM Programs… Cyber Risk Practices Aligned with ERM
Aid in decision making. Ensuring that an organization’s cyber security standards align with business objectives helps to mitigate overall risk for the organization. It is also an important component for maintaining colleague engagement in cyber security.
Are linked to the strategic objectives. Investments in cyber security should be aligned with strategic initiatives to achieve the growth goals of the organization (i.e. geographic expansion, new offerings, etc.)
Quantify and prioritize risk impacts. Analyzing the impact of a data breach aids in prioritizing where and what actions should be taken (e.g. updating security protocols, classifying data and purging obsolete records, etc.)
Articulate the risk. Aligning business impact analyses with cyber risks can help varying business areas maintain consistency when communicating on how cyber risk factors are affecting key business processes across the organization.
Prioritize and set expectations for critical investments in managing risk. Cyber risks with a potential for high impact to business areas or likelihood can be prioritized for mitigation actions based on organizational risk tolerance standards.

Key Considerations

Why should an organization align its cyber risk management with its ERM process?
Cyber risk affects every part of the business—from financial loss and legal exposure to operational disruption and reputational damage. Integrating it into ERM ensures a consistent, enterprise-wide approach to managing these impacts.

How does an organization begin to assess cyber risk? / What resources are necessary?
A typical starting point is performing a cyber security risk assessment based on a standard framework. This enables the organization to establish a baseline for cyber security controls and protocols that align with defined standards, making it possible to measure improvement targets annually and as the organization changes.

Key steps:

  • Align organizational standards with an established cyber security framework such as NIST CSF, ISO 27001, etc.
  • Identify areas for improvement and incorporate these into organizational risk registers and improvement roadmaps
  • Establish control baselines for the organization in order to accurately track progress
  • Periodically re-assess the risk assessment to ensure changes across the organization are accurately assessed

Who is typically involved in assessing cyber risks?
While cyber risk is often led by IT and security teams, effective assessment requires cross-functional input. Key stakeholders typically include:

  • Head of technology/head of cyber/CIO/IT director/data protection officer
  • Operations (e.g. data management, sales, BCM, finance)
  • Third-party management (planning and procurement)
  • Compliance/legal representative
  • Risk/insurance representative

These teams contribute across the assessment lifecycle—from documentation and interviews to reporting and board updates.

The audit committee is also a key audience, often requesting updates on cyber risk posture and its alignment with strategic initiatives.

When might an organization assess its cyber risks?
Organizations should assess their cyber risk at least annually, though a few factors may require a more frequent assessment cadence, including:

  • Industry risk profile and industry-specific regulations
  • Geographic expansion of business units into new regions
  • Introduction of new IT systems or platforms into the environment

These considerations should be evaluated across all business units and may necessitate more frequent assessments (e.g. semi-annual or even quarterly).

Bridging Cyber security and ERM

Cyber risk management and ERM share foundational elements that, when aligned, can strengthen organizational resilience, including:

  • Risk Identification and Assessment
  • Risk Response Planning
  • Monitoring and Reporting
  • Governance and Oversight
  • Communication and Reporting
  • Risk Response Planning

By bridging these disciplines, organizations can foster greater connectivity across functions, streamline risk responses, and enhance decision making.

Ready to strengthen your ERM program with cyber resilience at its core? Connect with Aon’s experts to explore how integrated risk management can help your organization navigate complexity, protect value, and drive confident decision making.

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

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