The implementation of the operational ERM process requires a strategic framework that links ERM with the corporate strategy and goals, the company’s risk-bearing capacity, and its performance and incentive systems. The risk-bearing capacity depends on a company’s financial reserves, liquidity, and creditworthiness, which can be measured by its financial rating. The risk-bearing capacity is related to the firm’s overall risk exposure under different scenarios or for different probabilities of occurrence. The targeted risk-return profile, on the other hand, is an expression of the company’s risk culture and the risk appetite of its shareholders and top management.