CHAPTER 1MODERN RISK MANAGEMENT

RISK QUOTE: More than at any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other to total extinction. Let us pray that we have the wisdom to choose correctly.

—WOODY ALLEN, WRITER/ACTOR/DIRECTOR/PRODUCER

RISK QUOTE: Better to remain silent and be thought a fool than to speak out and remove all doubt.

—ABRAHAM LINCOLN, U.S. PRESIDENT

In 1988, companies and managers began to discuss enterprise risk. A decision in one area can have major impact, for better or worse, on overall results, a possibility long recognized by economists, analysts, and managers. Stated differently, an optimal risk mitigation decision for a business unit may be suboptimal for the entity ...

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