Abstract
Enterprise Risk Management (ERM) has evolved from a compliance-oriented function into a strategic capability that enables organizations to thrive in volatile, uncertain, complex, and ambiguous (VUCA) environments. This paper conceptualizes ERM as a driver of strategic value through its alignment with Dynamic Capabilities Theory (DCT), emphasizing the mechanisms of sensing, seizing, and transforming. Drawing on a systematic literature review of 62 peer-reviewed studies, this study develops a conceptual model that illustrates how ERM practices, risk identification, assessment, response, monitoring, and communication strengthen dynamic capabilities and enhance organizational resilience, agility, innovation, and sustainability. The findings reposition ERM from a risk mitigation tool to a strategic enabler, offering actionable insights for executives on integrating ERM into strategic planning to improve adaptability and long-term competitiveness. This paper contributes to theory by reframing ERM as a capability-based approach and provides practical guidelines for leveraging ERM in dynamic and uncertain business environments.