Making Enterprise Risk Management Pay Off: How Leading Companies Implement Risk Management
Lessons in risk management from world-class practitioners.Risk managers can no longer operate in a vacuum: they must understand all the risks that impact today's enterprise, and involve all of the firm's leaders in managing those risks. Enlightened companies are meeting these challenges through enterprise risk management: a set of revolutionary techniques that go beyond mere "control" to contribute measurable business value.This book takes you behind the scenes at companies that are leading the way in developing and deploying enterprise risk management. You'll learn how they're developing new tools for identifying today's new risks; how they're improving the accuracy of their risk assessments and recalibrating their responses-and how enterprise risk management can identify not just debacles and "downsides," but breakthrough growth opportunities as well.* Making risk management strategic, not defensive From "control" to "value enhancement" * Enterprise risk management: Integrated, continuous, and broadly focused Moving risk management out of its traditionally disconnected "silos": how to do it, and why you must * New tools for identifying, ranking, and measuring risks Leading-edge approaches from Chase Manhattan, Microsoft, DuPont, Unocal, and other leaders * Risk management in an era of unprecedented, unrelenting change Managing the risks of globalization, interdependence, technological and marketplace change, and political and socioeconomic uncertaintyPart of a new series of books sponsored by the Financial Executives Research Foundation, a nonprofit affiliate of Financial Executives International, the preeminent professional association for senior financial executives, representing 15,000 financial executives worldwide. The Research Foundation, established in 1944, funded the research and case studies in this book.Integrating risk management across the entire enterpriseThe new roles and responsibilities of financial executives in enterprise risk managementNew areas of risk—and how to assess them rationallyScenario analysis, gain/loss curves, earnings-at-risk measurement, and other powerful new measurement toolsIncludes five in-depth case studies: Chase Manhattan, DuPont, Microsoft, Unocal, and United Grain GrowersToday, companies are called upon to manage an assortment of risks that would have been unimaginable even a decade ago. The solution is enterprise risk management, in which risk management activities are understood by—and integrated throughout—the entire organization.In this book, three leading practitioners present an accessible, case study-based introduction to this powerful new approach. They introduce the fundamental concepts and rationale underlying enterprise risk management, offer a concise overview of today's best techniques, and synthesize key lessons that can be learned from early adopters. Next, they present five in-depth case studies showing enterprise risk management at work in five key industries: Chase Manhattan in financial services, E.I. du Pont de Nemours & Company in manufacturing, Microsoft in information technology, United Grain Growers, Ltd. in food, and Unocal in energy.Today, financial professionals are transforming risk management from a narrowly focused control function to a key source of business value.Making Enterprise Risk Management Pay Offgives you tools and insights for making it happen in your organization."The authors go out of their way to avoid a jargon-filled technical discussion... blending interesting company history and extensive quotes from senior management interviews with discussions of the company's enterprise risk management system. Although this book serves best as a risk management resource for senior managers, its value goes well beyond that audience."—Barron's, May 7, 2001"...does a fine job of analyzing enterprise-wide risk management, the most noteworthy management development in many years."—Internal Auditing, May/June 2001