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Enterprise risk management (ERM) is an established management practice and is increasing in prominence as more firms spend substantial resources implementing ERM frameworks, partially induced by regulatory requirements. Yet, there is a lack of knowledge as to whether such frameworks add value and, if so, how the performance enhancing dynamic works. Drawing on survey data from 260 of the largest firms in Denmark, this study analyzes these empirical questions and finds that ERM is associated with higher profitability and lower financial leverage, and that strategic planning enforces these favorable outcomes. The study develops a new multidimensional measure of adherence to ERM practices where earlier studies typically have relied on dichotomous proxies. We discuss the implications of these findings for ERM practice and strategic management in general.