Fundamentals of Enterprise Risk Management
IN THIS SUMMARY
For many years, managers analyzed risks separately, without considering how they affected the business entity as a whole. In many cases, risk management was handled by the company’s chief financial officer, who often focused on a narrow set of risks, failing to coordinate the management of risk across the institution. Unit managers engaged in risk mitigation strategies that may have been optimal for their units but were suboptimal for the enterprise as a whole. Fundamentals of Enterprise Risk Management describes a better approach—one in which all of the risk an organization faces are managed in a single, comprehensive program. This approach identifies all of a business’ risks, constantly monitors the horizon for changing conditions, and shares information widely throughout the organization.