Empowered Enterprise Risk Management

Empowered Enterprise Risk Management

by Hakan Jankensgard, Petter Kapstad
Released March 2021
Publisher(s): Wiley
ISBN: 9781119700159

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Book description

In this book, two experts on the topic raise the question of why many ERM programmes end up as box-checking silos with almost no connection to important decision-making processes, whereas others are empowered and end up having a profound impact on the firm’s culture, governance structures, and strategy process. The book establishes a path to empowered ERM by drawing on insights from theory and hard-won lessons from practice. Success factors enabling this transition are thoroughly discussed in a start-to-finish narrative describing the theoretical underpinnings of ERM, its proven best practices, and onto more advanced topic such as risk budgeting and the integration of ERM into strategic decision-making.

Table of contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Preface
  5. CHAPTER 1: Introduction to Empowered Enterprise Risk Management
    1. WHY A THEORETICAL PERSPECTIVE?
    2. LESSONS FROM PRACTICE
    3. NOTE
  6. CHAPTER 2: Risk Defined
    1. VALUE‐CREATING RISK MANAGEMENT
    2. RISK MANAGEMENT
    3. DOWNSIDE RISK VERSUS UPSIDE POTENTIAL
    4. SUBJECTIVE PROBABILITIES
    5. IS VALUE THE RIGHT METRIC?
    6. RISKS VERSUS RISK‐TAKING
    7. NOTES
  7. CHAPTER 3: Risk Theory
    1. SILOS AND THEIR CONSEQUENCES
    2. THE SILO EFFECT ON RISK MANAGEMENT
    3. A THEORY OF ERM
    4. THE INFORMATION PROBLEM OF RISK MANAGEMENT
    5. THE AGENCY PROBLEM OF RISK MANAGEMENT
    6. OVER‐MANAGEMENT OF RISK
    7. UNDERMANAGEMENT OF RISK
    8. ERM AS A SOLUTION
  8. CHAPTER 4: Risk Culture
    1. THREATS TO RISK CULTURE
    2. SHORT‐TERMISM: CAUSES AND CONSEQUENCES
    3. CORPORATE CULTURES AND COMPENSATION PACKAGES
    4. CREATING THE BEHAVIOURS THAT SUPPORT A RISK CULTURE
  9. CHAPTER 5: Risk Governance
    1. THE ROLE OF THE BOARD OF DIRECTORS
    2. RISK OWNERSHIP
    3. A MORE GRANULAR LOOK AT RISK OWNERSHIP
    4. RISK GOVERNANCE TO SUPPORT INTEGRATED RISK MANAGEMENT
    5. THE THREE LINES OF DEFENCE
    6. RISK MANAGEMENT INDEPENDENCE
    7. NOTES
  10. CHAPTER 6: Risk Register
    1. WHAT SHOULD GO INTO A RISK REGISTER
    2. ESTIMATING PROBABILITY AND IMPACT
    3. AN EXTENDED RISK REGISTER
    4. NOTES
  11. CHAPTER 7: Risk Response
    1. RISK MITIGATION
    2. RISK TRANSFER
    3. RISK RETENTION
    4. THE INTEGRATED VIEW
    5. THE INTEGRATED RISK RESPONSE
    6. NOTES
  12. CHAPTER 8: Risk Appetite
    1. WHY RISK APPETITE DOES NOT WORK
    2. HOW TO MAKE PROGRESS
    3. THE WAY FORWARD
    4. RISK CAPACITY
    5. QUANTITATIVE EXAMPLE OF RISK CAPACITY
    6. NOTE
  13. CHAPTER 9: Risk Budgeting
    1. RISK BUDGETING AND QUANTITATIVE MODELS
    2. FINANCIAL MODELS WITH ACCOUNTING AND ANALYTICAL INTEGRITY
    3. PERFORMANCE‐aT‐RISK
    4. INTRODUCING CRITICAL THRESHOLDS
  14. CHAPTER 10: Risk Strategy
    1. STRATEGY PERFORMANCE
    2. STRATEGY FORMULATION AND SELECTION
    3. CORE STRATEGIC RISKS AND THE RISK RADAR
    4. STRATEGY EXECUTION
    5. STRATEGIC INTERACTION AND RISK MANAGEMENT
    6. NOTE
  15. CHAPTER 11: Risk in Practice: The Case of Equinor
    1. THE ERM VISION
    2. EARLY DEVELOPMENTS IN ERM
    3. RISK MAPPING IN EQUINOR
    4. RISK GOVERNANCE IN EQUINOR
    5. RISK CULTURE IN EQUINOR
    6. RISK OPTIMIZATION
    7. ERM AND STRATEGY
    8. FINAL THOUGHTS
    9. NOTES
  16. CHAPTER 12: Concluding Remarks
    1. REVISITING THE ERM PUZZLES
  17. Bibliography
  18. Acknowledgements
  19. Index
  20. End User License Agreement

Product information

  • Title: Empowered Enterprise Risk Management
  • Author(s): Hakan Jankensgard, Petter Kapstad
  • Release date: March 2021
  • Publisher(s): Wiley
  • ISBN: 9781119700159