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Practical Enterprise Risk Management

Book Description

Practical Enterprise Risk Management addresses the real need for organizations to take more managed risks in order to maximise business strategies and achieve long term goals. Based on ISO 31000 and applying current best practice, it provides templates and examples that can be adapted for any industry. Breaking down the theory on enterprise risk management, it helps you see risk as both an opportunity and a threat whilst giving you guidance on how to implement it. It provides models for Risk Adjusted Return on Capital to evaluate R.O.I and measure performance, advice on emergent risks, as well as best practice and advice on risk communication, transparency and protecting the brand.Including a comprehensive overview of risk management responsibilities for boards, Practical Enterprise Risk Management lifts the lid on the whole process, helping you to embed ERM into your organization, reach your goals and take more managed risks.

Table of Contents

  1. Foreword by Mrutyunjay Mahapatra
  2. 01     Introduction
  3. Outline
  4. Business is about taking risk
  5. The difference between taking managed and unmanaged risks
  6. Benefits of well-managed enterprise risk management
  7. The myths about risk
  8. Capacity to take risk
  9. Questions for senior management and the board to ask
  10. Notes
  11. 02     About enterprise risk management
  12. Outline
  13. Risk management
  14. Implementing the programme for ERM
  15. ERM – the process
  16. Essential attributes of ERM for delivering value and capacity
  17. Top level leadership in ERM
  18. Identifying risk: types of risk, risk lists and taxonomies
  19. Evaluating and prioritizing risk
  20. Governance, risk and compliance
  21. Questions for senior management and the board to ask
  22. Notes
  23. 03     Risk as an opportunity/threat to objectives and value drivers
  24. Outline
  25. Risk – opportunities and threats
  26. Risk as uncertainty
  27. Threat and opportunity management
  28. Dealing with threat
  29. Dealing with opportunity
  30. Differentiating between objectives, strategic goals and value drivers
  31. Questions for senior management and the board to ask
  32. Notes
  33. 04     Implementing an ERM programme
  34. Outline
  35. Establish the foundation – the operating model for ERM
  36. Documentation for ERM
  37. Language, oversight and governance
  38. Building capabilities: assess and develop responses and capabilities
  39. Improving capabilities: monitoring and communication
  40. Questions for senior management and the board to ask
  41. 05     Risk attitude, risk propensity and risk appetite
  42. Outline
  43. Risk aversion versus risk hungry
  44. Applications of a risk appetite tool
  45. Risk capacity versus tolerance
  46. Developing risk appetite frameworks
  47. The risk of not taking a risk
  48. Risk appetite and value drivers
  49. Organization behind the setting of risk appetite
  50. Examples of risk appetite statements
  51. Questions for senior management and the board to ask
  52. Notes
  53. 06     ERM culture, blame, boundaries and elephants in the room
  54. Outline
  55. ERM cultures and the blame culture
  56. Using risk appetite as a tool to destroy the blame culture
  57. Managing risk
  58. The link between managed risk taking, mice, Maslow and Herzberg
  59. The elephant in the room and conduct risk
  60. In the public interest
  61. Questions for senior management and the board to ask
  62. Notes
  63. 07     Embedding and integrating ERM
  64. Outline
  65. What does embedding mean?
  66. Main aspects of embedding ERM
  67. A 16-step plan for embedding ERM
  68. The three lines of play
  69. Questions for senior management and the board to ask
  70. Notes
  71. 08     Maturity in enterprise risk management
  72. Outline
  73. How risk maturity enables managed risk taking
  74. Action plan for measuring and tracking performance
  75. Questions for senior management and the board to ask
  76. Notes
  77. 09     Resilience and sustainable habits
  78. Outline
  79. Business continuity management
  80. The role of senior management
  81. Corporate social responsibility
  82. Questions for senior management and the board to ask
  83. Notes
  84. 10     Learning and communication
  85. Outline
  86. The learning habit
  87. ERM information systems
  88. External communication
  89. Questions for senior management and the board to ask
  90. Notes
  91. 11     Conformance, performance, roles, responsibilities and regulations
  92. Outline
  93. Managing conformance versus performance
  94. The role of boards in ERM
  95. Governance for ERM
  96. The role of internal and external audit in ERM
  97. Compliance requirements for risk management: various countries and industries
  98. Questions for senior management and the board to ask
  99. Notes
  100. 12     Deliverables from quantitative ERM approaches
  101. Outline
  102. Measuring and valuing
  103. Models for valuing risk and capital
  104. Own risk and solvency assessments – a useful model
  105. Stress testing and reverse stress testing
  106. Risks that cannot be valued
  107. Questions for senior management and the board to ask
  108. Notes
  109. 13     Simple, elegant ERM tools for senior management
  110. Outline
  111. Using cause and consequence analysis to transform risk approach
  112. Macro and micro risk management
  113. Questions for senior management and the board to ask
  114. Notes
  115. 14     ERM and performance management synergies
  116. Outline
  117. Risk management alignment within the organization
  118. Performance management
  119. Performance management methods
  120. Questions for senior management and the board to ask
  121. Notes
  122. 15     The key strategic questions for senior management and boards to ask themselves
  123. Outline
  124. Recognizing the risks <i xmlns="http://www.w3.org/1999/xhtml" xmlns:epub="http://www.idpf.org/2007/ops">of</i> versus the risks versus the risks <i xmlns="http://www.w3.org/1999/xhtml" xmlns:epub="http://www.idpf.org/2007/ops">to</i> the strategic plan the strategic plan
  125. The key strategic questions
  126. Summary