Purpose of the Book
Adoption of enterprise risk management (ERM) programs is a strong and growing global trend. However, while ERM programs have a lot of potential, traditional approaches to ERM often struggle to generate sufficient buy-in from internal stakeholders, such as business decision-makers. The primary reason for this is that traditional ERM approaches lack a business case for their adoption. In response to this difficulty, I developed the value-based ERM approach, and this book is its first in-depth presentation.
The value-based ERM approach is designed to have a built-in business case for its adoption. At its core, it is a synthesis of ERM and value-based management. This synthesis provides the missing link between risk and return. It is this connection that transforms ERM into a strategic management approach that enhances strategic planning and other business decision making. As a result, the value-based ERM approach is seen by internal stakeholders—business segment leaders, senior management, and the board—as a way to help them achieve their goals of profitably growing the business and increasing company value.
The value-based ERM approach has several other advantages as well. It works equally well in all industry sectors. I have used this approach to help implement ERM programs for corporate entities in a wide range of sectors, such as manufacturing, energy, entertainment, technology, services, telecommunications, banking, and insurance, as well as for non-corporate ...