Application of Enterprise Risk Management in the Islamic Economic System

Abstract

This study examines the application of Enterprise Risk Management (ERM) in the Islamic economic system. ERM is a strategic approach to identify, assess, and manage risks holistically to achieve organizational goals. From the perspective of Islamic economics, ERM is based on sharia principles such as fairness, transparency, and social responsibility. The Islamic economic system emphasizes fair risk sharing and prohibits usury and excessive speculation. This study uses a qualitative method with a literature study approach, utilizing related literature to explore the concept, implementation, and benefits of ERM in the context of Islamic economics. The results of the study indicate that the application of ERM based on Islamic values can improve financial stability, risk management efficiency, and the conformity of business practices with Sharia principles. In addition, the application of ERM also helps Islamic companies create competitive advantages and contribute to social justice. A deeper understanding of ERM in Islamic economics is expected to be a reference for practitioners, academics, and policymakers in developing risk management strategies based on Islamic values.