Making Enterprise Risk Management Pay Off: How Leading Companies Implement Risk Management [Paperback]

Thomas L. Barton (Author), William G. Shenkir (Author), Paul L. Walker (Author)

Book Description

ISBN-10: 0130087548 | ISBN-13: 978-0130087546 | Publication Date: February 18, 2002 | Edition: 1

Making Enterprise Risk Management Pay Off shows how top companies are transforming risk management into an integrated, continuous, broadly focused discipline that identifies and assesses risks more effectively, responds more precisely, and discovers not just "downsides" but breakthrough opportunities as well. Through five wide-ranging case studies - Chase Manhattan, Microsoft, DuPont, Unocal, and United Grain Growers - you'll learn powerful new risk management techniques that span the entire enterprise, and deliver unprecedented business value.

Editorial Reviews

From the Back Cover

Lessons in risk management from world-class practitioners.

Risk managers can no longer operate in a vacuum: they must understand all the risks that impact today's enterprise, and involve all of the firm's leaders in managing those risks. Enlightened companies are meeting these challenges through enterprise risk management: a set of revolutionary techniques that go beyond mere "control" to contribute measurable business value.

This book takes you behind the scenes at companies that are leading the way in developing and deploying enterprise risk management. You'll learn how they're developing new tools for identifying today's new risks; how they're improving the accuracy of their risk assessments and recalibrating their responses-and how enterprise risk management can identify not just debacles and "downsides," but breakthrough growth opportunities as well.

* Making risk management strategic, not defensive From "control" to "value enhancement" * Enterprise risk management: Integrated, continuous, and broadly focused Moving risk management out of its traditionally disconnected "silos": how to do it, and why you must * New tools for identifying, ranking, and measuring risks Leading-edge approaches from Chase Manhattan, Microsoft, DuPont, Unocal, and other leaders * Risk management in an era of unprecedented, unrelenting change Managing the risks of globalization, interdependence, technological and marketplace change, and political and socioeconomic uncertainty

Part of a new series of books sponsored by the Financial Executives Research Foundation, a nonprofit affiliate of Financial Executives International, the preeminent professional association for senior financial executives, representing 15,000 financial executives worldwide. The Research Foundation, established in 1944, funded the research and case studies in this book.

• Integrating risk management across the entire enterprise
• The new roles and responsibilities of financial executives in enterprise risk management
• New areas of risk—and how to assess them rationally
• Scenario analysis, gain/loss curves, earnings-at-risk measurement, and other powerful new measurement tools
• Includes five in-depth case studies: Chase Manhattan, DuPont, Microsoft, Unocal, and United Grain Growers

Today, companies are called upon to manage an assortment of risks that would have been unimaginable even a decade ago. The solution is enterprise risk management, in which risk management activities are understood by—and integrated throughout—the entire organization.

In this book, three leading practitioners present an accessible, case study-based introduction to this powerful new approach. They introduce the fundamental concepts and rationale underlying enterprise risk management, offer a concise overview of today's best techniques, and synthesize key lessons that can be learned from early adopters. Next, they present five in-depth case studies showing enterprise risk management at work in five key industries: Chase Manhattan in financial services, E.I. du Pont de Nemours & Company in manufacturing, Microsoft in information technology, United Grain Growers, Ltd. in food, and Unocal in energy.

Today, financial professionals are transforming risk management from a narrowly focused control function to a key source of business value. Making Enterprise Risk Management Pay Off gives you tools and insights for making it happen in your organization.

"The authors go out of their way to avoid a jargon-filled technical discussion... blending interesting company history and extensive quotes from senior management interviews with discussions of the company's enterprise risk management system. Although this book serves best as a risk management resource for senior managers, its value goes well beyond that audience."— Barron's, May 7, 2001

"...does a fine job of analyzing enterprise-wide risk management, the most noteworthy management development in many years."— Internal Auditing, May/June 2001

About the Author

THOMAS L. BARTON is Kathryn and Richard Kip Professor of Accounting and KPMG Research Fellow of Accounting at the University of North Florida. He holds a Ph.D. in accounting from the University of Florida and is a certified public accountant (CPA). Dr. Barton has over 35 professional publications, including research articles in Barron's, Decision Sciences, Abacus, Advances in Accounting, CPA Journal, and Management Accounting. He coauthored the 1998 Financial Executives Research Foundation study, Open Book Management: Creating an Ownership Culture. He received the Lybrand Silver Medal for his article, "A System is Born: Management Control at American Transtech." Dr. Barton is the creator of the Minimum Total Propensity to Disrupt method of allocating gains from cooperative ventures. This method has been the subject of several articles in Decision Sciences. He is also a recognized expert in the application of management controls to highly creative activities. Dr. Barton has taught over 100 professional development seminars and has extensive consulting experience with a wide cross section of organizations in the public and private sectors. Dr. Barton is the recipient of several teaching awards for his undergraduate and graduate work. He was a winner of the State University System of Florida's prestigious Teacher Incentive Program award in 1994, the program's inaugural year.

WILLIAM G. SHENKIR is William Stamps Farish Professor of Free Enterprise at the University of Virginia's McIntire School of Commerce. He was dean of the McIntire School from 1977 to 1992, and was formerly Technical Advisor and Project Director for the Financial Accounting Standards Board. Shenkir's research and consulting interests include management accounting, open book management, and risk management. He has served as Faculty Fellow for Price Waterhouse and Exxon; as auditor for the United States Air Force Auditor General's office; and on the board of directors for Dominion Bankshares Corporation, First Union National Bank of Virginia, and ComSonics. His publications include Open-Book Management: Creating An Ownership Culture (with Thomas L. Barton and Thomas N. Tyson).

PAUL L. WALKER is Associate Professor of Accounting at the University of Virginia's McIntire School of Commerce. His research and consulting interests include audit markets, audit failures, and auditor independence, as well as audit regulation, risk, and fees. He has served in the Audit Division at Ernst & Young, in the Tax Division at KPMG Peat Marwick, and in the Securities Clearance & Operations, Internal Audit, Data Processing organization at InterFirst Bank, Dallas, TX.

Product Details

• Paperback: 272 pages
• Publisher: Financial Times / Prentice Hall; 1 edition (February 18, 2002)
• Language: English
• ISBN-10: 0130087548
• ISBN-13: 978-0130087546
• Product Dimensions: 9.3 x 6.3 x 0.6 inches
• Shipping Weight: 14.4 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #364,693 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

14 of 14 people found the following review helpful:

4.0 out of 5 stars Nice book, but read this for risk management fundamentals, December 25, 2004

By 

Serge D. E. Diekstra (Leiden, the Netherlands) - See all my reviews
(REAL NAME)   

This review is from: Making Enterprise Risk Management Pay Off: How Leading Companies Implement Risk Management (Paperback)

After reading `Making Enterprise Risk Management Pay Off', I must say that I can recommend it. Buy it if you want to know how large companies have been dealing with risk management in the past years. This book will not really help you understand the fundamentals of risk management, and that isn't the primary focus of this book.

I would recommend that you do not read `Making Enterprise Risk Management Pay Off' just by itself. I highly recommend `Controlling the controllable: the management of safety' by Dr. Jop Groeneweg. This is a must-read if you are interested in risk management and it will give you an good basis for reading `Making Enterprise Risk Management Pay Off'.

`Making Enterprise Risk Management Pay Off', unlike what may be suggested, isn't about companies on the cutting edge of risk management. In my opinion that's only partly true. These companies are dealing with highly visible risks, but in risk management that is the easy part of the job. Dealing with the invisible risks, most often those risks lurking in a company's own organization, is much harder. It is unfortunate that the Tripod risk management methodology isn't discussed in this book because it is THE methodology for integrated risk management.

I would recommend that those interested also read up on a risk management tool called BowTie XP, which really represents the leading edge of risk management research today. I believe the majority of companies in this book will be using BowTie XP for risk management in the coming years.

`Making Enterprise Risk Management Pay Off' is quite readable and I enjoyed reading it. When you read it, realize that risk management is evolving quickly. Don't try to copy the companies in this book with respect to risk management, unless you only want to deal with highly visible risks.

16 of 19 people found the following review helpful:

5.0 out of 5 stars Great Lessons in De-Risking, in a Very Readable Book !, March 2, 2002

By A Customer

This review is from: Making Enterprise Risk Management Pay Off: How Leading Companies Implement Risk Management (Paperback)

After the Enron meltdown, risk management is as hot as fire. You can?t pick up the newspaper without stories about all the risks facing businesses and investors.

I run a medium size business in a big city. If you want to ?de-risk? a company, you need to learn from managers who are already doing it and doing it well. This book has very detailed cases about the risk management programs at companies like Microsoft and DuPont with managers telling their own stories. The book is short on fancy theories and long on practical ideas.

I admit I was surprised to see Chase bank among these elite companies. Chase wrote off $500 million because of Enron. But you have to wonder how much more they would have written off without a good risk management program. No one ever said these systems are perfect. The Chase chapter even describes two big problems the bank had with their bookkeeping and how they were fixing them.

This book has everything you need to get started in a good risk management program. Lord knows businesses had better manage their risks or they?re history.

3 of 6 people found the following review helpful:

2.0 out of 5 stars Not As Helpful as the Title Suggests, February 24, 2006

By 

J. J. Gehrke "JJG" (Amsterdam, The Netherlands) - See all my reviews
(REAL NAME)   

This review is from: Making Enterprise Risk Management Pay Off: How Leading Companies Implement Risk Management (Paperback)

If you are interested to see what other companies are doing, who have no relevance to yours, this book is for you. If you are looking for practical guidance that you can use in your own situation, buy something else.