Enterprise Risk Management, 2nd Edition

CHAPTER 1Enterprise Risk Management: An Introduction and Overview

 

JOHN R.S. FRASER, FCPA, FCA

Former Chief Risk Officer, Hydro One Networks Inc.

 

ROB QUAIL, BASc

Principal, Robert Quail Consulting

 

BETTY J. SIMKINS, PhD

Department Head of Finance, Regents Professor of Finance, and Williams Companies Chair of Business, Spears School of Business at Oklahoma State University

 

It's not the strongest of the species that survives, nor the most intelligent, but those that are the most responsive to change.

—Often attributed to Charles Darwin, British naturalist

 

Prediction is very difficult, especially if it's about the future.

—Niels Bohr, 1922 Nobel Laureate in Physics

WHAT IS ENTERPRISE RISK MANAGEMENT?

We begin this chapter and the book with the above two quotes to highlight the importance of organizations being able to adapt to change and to being prepared for the uncertain future. We believe this book is crucial to organizations being ready for change, survival, and success and would like to see more organizations adopt enterprise risk management (ERM). ERM is about preparing the organization to survive and thrive in the future, as the Charles Darwin quote implies about living organisms, and we extend to our context. We believe that the organizations that are successful are the ones that are best able to adapt and adjust to the changing world they find themselves. History has shown this for both species and organizations. The Niels Bohr quote reminds us how difficult ...