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The correct choice highlights a significant limitation of Enterprise Risk Management (ERM): faulty human judgment and management override. No system, including ERM, can entirely eliminate the risks associated with human decision-making. Individuals within an organization may make poor judgments based on biases, incomplete information, or misinterpretation of data, which can lead to ineffective risk management outcomes. Furthermore, management override occurs when individuals in positions of authority bypass established procedures or controls, creating vulnerabilities that ERM processes are unable to address.

While ERM aims to provide a structured approach to identifying, assessing, and mitigating risks, it inherently relies on the actions and decisions of individuals within the organization. Thus, flaws in judgment or lapses in ethical decision-making can significantly impact the effectiveness of the ERM framework.

The other options do not accurately depict limitations of ERM. The notion of eliminating all types of risk is unrealistic, as risk is an inherent aspect of business. The claim of increased cost-effectiveness in all businesses doesn't account for varying contexts and may not be universally applicable. Finally, while ERM seeks to enhance decision-making processes, it cannot guarantee better outcomes since decision quality ultimately depends on the information and the judgment of the decision-makers involved.