Fundamentals of Enterprise Risk Management: How Top Companies Assess Risk, Manage Exposures, and Seize Opportunities

Fundamentals of Enterprise Risk Management: How Top Companies Assess Risk, Manage Exposures, and Seize Opportunities

Fundamentals of Enterprise Risk Management: How Top Companies Assess Risk, Manage Exposures, and Seize Opportunities

Fundamentals of Enterprise Risk Management: How Top Companies Assess Risk, Manage Exposures, and Seize Opportunities

Synopsis

Using examples from companies such as Home Depot, Airbus, Boeing, and Nokia, Fundamentals of Enterprise Risk Management takes a fresh look at one of the hottest topics in business today. Showing readers in charge of monitoring operational exposures in corporations, nonprofit organizations, and government agencies how they can best determine and balance opportunities against the possibilities of loss, this book provides clear strategies to help readers:




recognize both internal and external exposures

• understand important concepts such as risk mapping and risk identification

• recognize the weaknesses of current ERM systems

• align risk opportunities with their organization'sbusiness model

• stay in line with Sarbanes-Oxley compliance


The book introduces innovative new concepts such as hierarchical risk structures, alignment of risks with the business model, creation of a central risk function, and the role of an ERM knowledge warehouse. Featuring enlightening case studies and practical exercises, this essential book shows readers how they can implement ERM theright way at their organizations.

Excerpt

RISK QUOTE: Keep your friends close, and your enemies closer.
—SUN-TZU, CHINESE GENERAL
AND MILITARY STRATEGIST,
AROUND 400 B.C.

RISK QUOTE: This was my father’s study. He taught me a lot of
things in this room. He taught me to keep my friends close and
my enemies closer
.

—MICHAEL CORLEONE IN THE GODFATHER (1976)

Welcome to the world of enterprise risk management (ERM), one of the most popular and misunderstood of today’s important business topics. It is not very complex. It is not very expensive. It does add value. We just have to get it right. Until recently, we have been getting it wrong.

This is really a book about risk from a new perspective. The journey carries us into the heart of risk management and risk opportunity. It is mostly about how to do a better job of risk identification. If we define the problem correctly and share our findings, we can reduce surprises—not eliminate them, mind you, but get many of them under control.

ERM tells us it is a new world of risk. No longer is risk management largely the purview of the chief financial officer. The risk picture is incomplete when limited to the financial component, which actually is the scorecard, not the driver, for risk mitigation. This realization has encouraged new approaches to manage risk and seize opportunity.

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