ESSENTIALS OF ENTERPRISE RISK MANAGEMENT
HERE WE TELL THE STORY of why organizations should create modern risk management
programs. Risks are related. One risk affects others as they cross the often-artificial
walls of day-to-day operations. People can be too close to risk or just too busy to
recognize impending critical problems.
We start with the features of modern risk management, a discipline that morphed
from a narrow insurance-buying role. Stories and examples help us grasp hazard
risk management as a foundation for ERM. What is modern risk management? What
does it mean for an organization? What are the contributions it makes to our
understanding of risk?
Then we take a detour. Two challenges arose in 2007 and 2008 that seemed to
undermine ERM. We examine Nassim Taleb’s concept of the black swan and what it
means for risk management. We follow up the 2008 financial crisis with the lessons
we should have learned. We finish with the implementation of an ERM program.
How can it be done? How should it be done? What resistance can we expect
