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Fundamentals of Enterprise Risk Management: How Top Companies Assess Risk, Manage Exposure, and Seize Opportunity by John J. Hampton

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... 2 Concept of Risk[3] Berdasarkan Gambar 1 tentang konsep Risiko maka dapat diketahui level of risk (tingkatan risiko). Berdasarkan variabel yang digunakan, probability dan impact, maka level of risk dapat diklasifikasikan sebagai berikut [3]: 1. ...
... Arguably, one might link its existence to the concept of Enterprise Risk Management, because risk appetite is a way of assessing how much risk the firm is willing to take, which is later monitored through the theoretically broadlyencompassing ERM framework. ERM, in turn, emerged "in the late 1980s as an extension of hazard risk management" (Hampton, 2009). One of the reasons risk appetite frameworks are used widely across organisations, is their characteristic of being a common discussion point for conversations within business, similarly to Hall's (2010) observation about the role accounting information plays in organisations: "the strengths of accounting information vis-à-vis other information at a manager's disposal […] include its aggregation properties and its role as a common language to facilitate communication among managers with different backgrounds, experience and knowledge" (Hall, 2010). ...
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This thesis examines the emergence of risk oversight since the global financial crisis, considering how different actors construct the idea of oversight and examining multi-level accountabilities that make it an organisational reality. The practice of oversight is assessed by 61 interviews and 17 weeks of field immersion in major financial institutions in London. The research questions are: ‘How does the practice of risk oversight differ from management?’, ‘How has the concept of oversight evolved?’, ‘Where exactly within financial organisations does risk oversight happen?’, and ‘How do Risk Committee members operationalise their risk oversight role?’ Tentative conclusions are also drawn on the extent to which enhancements in risk oversight since the crisis have strengthened financial institutions’ ability to manage risk. The first empirical chapter considers the evolution of regulatory attitudes to risk oversight before and after the financial crisis, and discusses the changing role of non-executives. The second empirical chapter on board risk committees discusses their accountability and relationships, both within and outside the firm. It shows board risk committee members to be an important part of the fabric of oversight who are still ‘feeling their way’ towards a stable definition of their roles and functions. The third empirical chapter discusses how oversight is organised within financial institutions. This is now commonly done through the ‘Three Lines of Defence’ framework. This is an idealised framework for risk governance that delineates how three layers of risk involvement (production, risk management and internal audit) are differentiated and also defined by their relations of oversight to each other. The last chapter discusses information intermediaries: the people within firms who create information flows within the oversight structures. Information is at the core of any oversight practice and this chapter shows that providing it to risk overseers, accurately and comprehensively, is a continuous struggle for the various parties involved.
... Universities with collaboration with research centers and business representatives began to organize special courses concerning these issues (Hot, 2011). Organizations implementing ERM have begun to notice that their employees perceive risks only as a dangers, whereas if it is good managed, it becomes an opportunity for development (Hampton, 2009). Building ERM structure, we should specify 7 major components, they include:  Risk identification -we assume that it's possibility to occur is already included in risk definition, and lost opportunity is a bigger danger than business interruption,  Identification of risk owner -it is an assignment of owner which has an appropriate experience and skills in exposure management to each risk category,  Alignment of responsibility for risk -risks are grouped in such a way that they can be managed by one owner,  Creating a central risk function -it is usually a person responsible for coordination of discussion about the risk. ...
Article
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Nowadays, there is a large variability in business environment, cause by economic and political circumstances. It sheds new lights on the issue of risk management in business. Companies that want to stay in the market, must in dynamically way change their exposure to risk. The article presents analysis of business risk management models in international energy companies. Also, authors' professional experience in this industry was used. It has allowed for compilation of knowledge referring to the literature and experience of business practitioners. The authors indicated crucial areas of companies which using good practices are able to respond to changes in a flexible way.
... Enterprise risk management is a broad and complex concept that reaches into every major area of an organization. ERM is the process of identifying major risks that confront an organization, forecasting the significance of those risks in business processes, addressing the risks in a systematic and coordinated plan, implementing the plan, and holding key individuals responsible for managing critical risks within the scope of their responsibilities [2]. ...
Chapter
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The last decade has been extraordinary, as it is marked by a succession of disasters. The risks in supply chain are critical because of increasing outsourcing, off-shoring, product variety, lean manufacturing and supply chain security. Moreover, organizations and societies are at a greater risk of system failure because of the massive interdependency throughout the global supply chains. Due to those facts, continuity is the main concern of any supplier. This chapter gives an overview on how a better supply chain decision making with risk can be made so as to achieve supply chain resilience and business continuity.
... After few years, when financial crisis exploded, some looked at it as a failure of previous regulation and especially the TRM in large financial institutions (Hampton, 2009, p. 66; Fraser and Simkins, 2010, p. 27 ...
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One of the main problems, facing power system utilities today, is the problem of optimizing their own limited technical and economic resources and creating such an assets management system, that will provide comprehensive assessment and prediction of the technological risks of power network equipment operation. Risk-based approach is generally subdivided into three stages: risk analysis, risk assessment and risk management, description of which is provided at the introductory part of the paper. The research mainly addresses the problems of power network equipment operational risks assessment, based on the analysis of the influence of various technical parameters and indicators on the accuracy and quality of risks’ estimations. Within the framework of the research, a novel scenario-based probabilistic approach to risks assessment as a part of power network assets management problem is provided. Power equipment risks are calculated according to estimated technical state of the units under consideration, which significantly improves the quality of risk-management. The effectiveness of the proposed approach is demonstrated on the basis of power transformer operational risks assessment problem.
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The aim of the paper is to outline the new trends in modern actuarial sciences in order to help the researchers to find new domains of activity and university professors teaching future actuaries to prepare special courses. The paper begins by description of actuarial profession and a brief historical sketch. After recalling the main achievements of the first two periods in actuarial sciences, we describe the new research directions of the third and fourth periods characterized by interplay of insurance and finance, unification of reliability and cost approaches, as well as, consideration of complex systems. Sophisticated mathematical tools are used for analysis and optimization of insurance systems including dividend payment, reinsurance, and investment. Discrete-time models turned out to be more realistic in some situations for investigation of insurance problems.
Chapter
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Chapter
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تهدف الدراسة إلي إيجاد إطارا يربط بين تطبيق مفهوم إدارة مخاطر المنظمات ومكونات نظم الرقابة الداخلية ، وذلك بهدف تحقيق الأهداف وتفعيل التوجه الاستراتيجي ومواجهة أية انحرافات عن المسار المحدد. من خلال توسط مفاهيم إدارة المعرفة . وتم ذلك بالتطبيق على عينة من الشركات التي تعمل في مجال الصناعات الغذائية بالمملكة العربية السعودية حيث بلغت العينة 385 وحدة معاينة تم استيفاء 288 استمارة صحيحة أي بنسبة 75% تقريباً. وباستخدام مجموعة من الأساليب الإحصائية ببرنامجي (Spss, Amos) لاختبار صلاحية النموذج وحساب جودة التوافق الكلية لنموذج القياس
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In times of continuous change and volatile markets, organizations are increasingly characterized by downsizing, work intensification, and resource rationalization. This has resulted in diversification, and the emergence of new risks within the field of occupational health and safety, with an important impact. This paper focuses on one such type of risk in the modern workplace-psychosocial risks. The current study aimed to explore stakeholder perspectives, regarding the extent to which psychosocial risks are incorporated into strategic risk management practices, at both the business and policy level. Semi-structured interviews were conducted with 14 professionals, representing employer, expert, policy maker, and trade union stakeholder perspectives. It was found that the majority of organizations do not sufficiently, if at all, understand and incorporate psychosocial risks into strategic decision making, whereby the key barrier related to practical difficulties of not knowing how to manage psychosocial risks adequately. The study found that there is a need to close the gap between policy and practice on a number of levels. Future recommendations comprise a policy framework and infrastructure underpinned by educational initiatives, partnerships, and networks to drive a shift in attitudes toward recognizing the duality of the concept of risk (including both potential negative and positive outcomes) and moving beyond simple regulatory compliance.
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Enterprise Risk Management (ERM) has emerged as a construct that ostensibly overcomes limitations of silo-based traditional risk management (TRM), yet little is known about its effectiveness. The scant research on the relationship between ERM and firm performance has offered mixed findings, and has been limited by the lack of a suitable proxy for the degree of ERM implementation. Using Standard and Poor’s (S&P) newly available risk management rating, we find evidence of a positive relation between increasing levels of TRM capability and firm value but no additional increase in value for firms achieving a higher ERM rating. Considering these results, we suggest directions for future research.
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