Enterprise Risk Management (Preview)

PART 1 Concepts and Methods Overview Part 1 outlines basic and advanced risk management concepts and methods. It follows a progression of knowledge developed over six chapters that are logically sequenced to facilitate learning. By the end of Part 1, the reader achieves an intermediate level of knowledge of enterprise-level risk management concepts and methods. Chapter 1 creates an awareness of risk and risk management by describing risks, the evolution of risk management, the regulations and guidelines applicable to risk mana- gement, and organizational transformations resulting from risk management. It also outlines the benefits and limitations of risk management, and concludes by providing an overview of emerging professions associated with risk management. Chapter 2 introduces the concepts that help understand the components, categories and characteristics of risks. It also explains how to assess risks and display risk assessment results. In addition, it explains risk culture, risk attitude, risk appetite and risk tolerance. Chapter 3 describes risk management systems and capabilities. It outlines how to design, document and implement risk management frameworks. It provides a detailed overview of key considerations associated with the components of risk management frameworks. Chapter 4 details the risk management process, building on the concepts introduced in preceding chapters. The process activities covered include context analysis, risk identifi- cation, risk analysis, risk assessment, risk response, risk monitoring and reporting. Chapter 5 focuses on risk management responses. It explores risk responses based on decisions to avoid, retain or transfer risks. In doing so, it provides a detailed overview of risk control and risk financing techniques associated with risk retention and risk transfer. Chapter 6 is dedicated to risk management integration. It outlines risk management integration mechanisms, explains the Three Lines of Defense model and explains how risk management integrates with internal control systems. In addition, it provides a detailed overview of risk management integration with strategy and performance. Chapters 1. Risk Management Awareness 2. Risk Management Concepts 3. Risk Management Framework 4. Risk Management Process 5. Risk Response 6. Risk Management Integration