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.