Empowered Enterprise Risk Management: Theory and Practice

✍ Scribed by Hakan Jankensgard, Petter Kapstad

• Publisher: Wiley
• Year: 2021
• Tongue: English
• Leaves: 227
• Series: Wiley Corporate F&A
• Edition: 1
• Category: Library

✦ Synopsis

Surveys reveal that most corporations devote considerable resources to risk management. However, while the multiple benefits of enterprise risk management (ERM) are evident, many executives remain unsure how to approach it. Written by two experts on the topic, Empowered Enterprise Risk Management offers organisations a set of tools for implementing the proven holistic risk management practices that will help companies realise fewer unexpected events, improve risk responses and facilitate the elimination of various suboptimal practices associated with the traditional, silo-based approach to risk management.

Empowered Enterprise Risk Management is a practical book filled with essential information needed to implement an effective ERM program and case studies that highlight each particular aspect or application of managing risk.

✦ Table of Contents

Cover
Title Page
Copyright Page
Contents
Preface
Chapter 1 Introduction to Empowered Enterprise Risk Management
Why a theoretical perspective?
Lessons from practice
Chapter 2 Risk Defined
Value-Creating Risk Management
Risk Management
Downside Risk Versus Upside Potential
Subjective Probabilities
Is Value the Right Metric?
Risks Versus Risk-Taking
Chapter 3 Risk Theory
Silos and their consequences
The silo effect on risk management
A theory of ERM
The information problem of risk management
The agency problem of risk management
Over-management of risk
Undermanagement of risk
ERM as a solution
Chapter 4 Risk Culture
Threats to Risk Culture
Generalized optimism
Inertia
Short-termism
Short-Termism: Causes and Consequences
Corporate Cultures and Compensation Packages
Creating the Behaviours That Support a Risk Culture
Chapter 5 Risk Governance
The Role of the Board of Directors
Risk Ownership
A More Granular Look at Risk Ownership
Risk Governance to Support Integrated Risk Management
The Three Lines of Defence
Risk Management Independence
Chapter 6 Risk Register
What Should Go into a Risk Register
Estimating Probability and Impact
An Extended Risk Register
Chapter 7 Risk Response
Risk Mitigation
Risk Transfer
Risk Retention
The Integrated View
The Integrated Risk Response
Chapter 8 Risk Appetite
Why Risk Appetite Does Not Work
How to Make Progress
The Way Forward
Risk Capacity
Quantitative Example of Risk Capacity
Chapter 9 Risk Budgeting
Risk Budgeting and Quantitative Models
Financial Models with Accounting and Analytical Integrity
Performance-at-Risk
Introducing Critical Thresholds
Chapter 10 Risk Strategy
Strategy Performance
Strategy Formulation and Selection
Core Strategic Risks and the Risk Radar
Strategy Execution
Strategic Interaction and Risk Management
Chapter 11 Risk in Practice: The Case of Equinor
The Erm Vision
Early Developments in Erm
Risk mapping in Equinor
Risk governance in Equinor
Risk culture in Equinor
Risk optimization
ERM and strategy
Final thoughts
Chapter 12 Concluding Remarks
Revisiting the Erm Puzzles
Bibliography
Acknowledgements
Index
EULA