Managing risks
Subtitle: towards a contingency theory of enterprise risk management
By: Anette Mikes, Robert Kaplan
Contributors: Kaplan, Robert S.; Harvard Business School
Edition: Revised edition
Series: Working paper / Harvard Business School -- 13-063; Working paper (Harvard Business School) -- 13-063
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston]
Language: eng
Number of pages: 41
Description: Enterprise Risk Management (ERM) has become a crucial component of contemporary corporate governance reforms. Now that principles, guidelines, and standards abound, it is time to take stock. Has the idea of ERM reached maturity with proven, unambiguous concepts and tools? Or is it still emerging and unproven? Or can it be simply taken for granted, its value "proven" by the apparent demand?

This paper portrays ERM as an evolving discipline, and presents empirical findings from academic papers and our own field research on its current state of maturity. The academic studies explore factors that influence the adoption and impact of ERM but have produced few significant results because of an inadequate and insufficiently specified concept of ERM. Based on a ten-year field project, over 250 interviews with senior risk officers, and three detailed case studies in high reliability organizations, we propose a contingency framework for ERM, describing the emerging design parameters that help to explain the observable variation in the "ERM mix" adopted by organizations. We also propose a new contingent variable: the type of risk that the ERM practices address. We outline a "minimum necessary contingency framework" (Otley, 1980) that is sufficiently nuanced, yet observable to empirical researchers so that they may, in due course, hypothesize about "fit" between contingent variables, such as risk types and the ERM mix, as well as outcomes (organizational effectiveness).
Notes: "January 2013. (Revised May 2013.)"--Publisher's Web site.

Includes bibliographical references (pages 37-41).