##m as a process that enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build stakeholder value. borrowing from erm literature, i would say that erm includes • aligning the entity's risk appetite and strategies, • enhancing the rigor of the entity's risk - response decisions, • reducing the frequency and severity of operational surprises and losses, • identifying and managing multiple and cross - enterprise risks, • proactively seizing on the opportunities presented to the entity, and • improving the effectiveness of the entity's capital deployment. some of you are probably familiar with the erm framework published over a year ago by the committee of sponsoring organizations of the treadway commission, or coso. the coso framework provides a useful way to look at erm and helps generate further discussion. in the coso framework, erm consists of eight interrelated components derived from the way management runs an enterprise and integrated with the management process : ( 1 ) internal environment, ( 2 ) objective setting, ( 3 ) event identification, ( 4 ) risk assessment, ( 5 ) risk response, control activities, ( 7 ) information and communication, and ( 8 ) monitoring. each of these is described in more detail in the coso literature. notably, the coso framework states explicitly that, while its components will not function identically within every entity, its principles should apply to all sizes of institutions. small and mid - size entities, for example, may choose to apply the framework in a less formal and less structured way and scale it to their own needs - as long as quality is maintained. this underscores the message from bank supervisors that good risk management is expected of every institution, regardless of size or sophistication. naturally, there will still be some tension between what supervisors expect and what bankers do, but we hope that supervisory expectations for risk management are becoming more and more aligned with the way that bankers run their businesses. i would now like to discuss a few recent examples from banking that highlight the importance of erm. with the benefit of hindsight, the financial regulators and the industry have been trying to distill the lessons learned from these recent breakdowns in risk management and internal control in the financial services sector. compliance risk one area in which erm provides tangible value is the area of compliance risk, which can be defined as the risk of legal or regulatory sanctions, financial loss, or damage to an organization's reputation and

- a dream of success - and work like hell. " uncle sam believed people need guides, role models, and taskmasters to take advantage of the greater opportunities he helped to make possible. we call those guides, role models, and taskmasters " mentors " for short. i found many mentors along my academic journey, and i would like to give special thanks to those i met through the diversity initiative for tenure in economics, which sandy darity started at duke in 2008. the initiative is a research mentoring workshop that pairs junior faculty with mentors who can help them navigate the path to tenure. it has seen 53 initiative fellows being promoted and tenured at institutions of higher learning. 1 / 2 bis - central bankers'speeches i am grateful to all the mentors who took my ideas seriously, including art goldsmith who was a dite mentor, helped me sharpen the hypotheses that emerged from them, and pressed me to think hard about the best data and methods to test these hypotheses. graduate and undergraduate students from many backgrounds ask me how to find mentors that share their background. i tell them they will need more than one mentor and to seek out mentors who have different backgrounds and expertise such that they will be exposed to a wide range of views and experiences. for just one paper on violence and patents, i had several mentors, among them george akerlof, ken arrow, sandy darity, barry eichengreen, milton friedman, alan krueger, paul romer, and jeff wooldridge. most importantly, make sure your mentors challenge you and hold you accountable. and when the time comes, it is incumbent on you - on all of us, really - to become a mentor. that is what uncle sam did. that is one reason i was grateful to lead the american economic association's summer program, to receive the aea mentoring program's impactful mentor award for working with graduate students, and to participate in and support other initiatives to train young economists. mentors help convert hope and promise into action, enabling those who come after us to build a better future. as i learned from uncle sam, there is no higher calling. in closing, let me express my hope that accepting this career achievement award does not mean i am officially retired. but more seriously, i am very grateful to be recognized and in the company of colleagues who have stood by me and fought with me to improve our field. i accept