Implementing Enterprise Risk Management: From Methods to Applications

Praise for Implementing Enterprise Risk Management

"James Lam provides a strong case that ERM should be a continuous process that is aligned with the strategy and risks of the organization. He offers detailed and practical information on how to structure a robust, dynamic process that stays closely attuned to business risks and how to ensure that ERM fulfills the expectations of all stakeholders."
Ann C. Berzin, Board Member of Exelon Corporation, Ingersoll–Rand plc

"In these times of rapid change and business model disruption, ERM must go beyond regulatory checklists and compliance. Effective implementation of ERM informs business strategy and can lead to breakthrough value creation. James Lam makes a compelling argument that boards have both a strategic and a fiduciary responsibility to ensure that a strong ERM program is in place, and gives wise and practical guidance on how to do so."
Irene Chang Britt, Board Member of Dunkin′ Brands, Tailored Brands, TerraVia; CEO, ICB Enterprises, LLC

"In a world of heightened expectations from investors, regulators, and the public, this book is a must read for corporate directors and executives on the keys to effective risk oversight and how to successfully integrate it into corporate strategy."
Robert H. Herz, Board Member of Fannie Mae, Morgan Stanley, Workiva; Former Chairman of the Financial Accounting Standards Board (2002–2010)

"Well, it should be crystal clear from reading this latest book why James Lam was invited to be on the COSO Advisory Committee to revise the 2004 ERM framework. He′s a true thought leader and luminary, helping us all to make progress on the ERM journey to higher performance."
Robert B. Hirth, Jr., Chairman, Committee of Sponsoring Organizations of the Treadway Commission (COSO); Senior Managing Director, Protiviti

"A terrific compendium of practical approaches and case studies for implementing an effective ERM framework. James Lam′s advocacy of performance feedback loops provides an important innovation to adaptive risk management programs. This book also highlights the increasingly critical role of Chief Risk Officers in defining strategy for companies that adhere to a clearly articulated risk appetite statement."
Bradford Hu, Chief Risk Officer, Citigroup

Preface

Acknowledgments

I. ERM in Context

1. Fundamental Concepts and Current State

2. Key Trends and Developments

3. Performance–Based Continuous ERM

4. Stakeholder Requirements

II. Implementing an ERM Program

5. The ERM Project

6. Risk Culture

7. The ERM Framework

III. Governance Structure and Policies

8. Three Lines of Defense

9. Role of the Board in ERM

10. The View from the Risk Chair (E∗TRADE case study)

11. Rise of the Chief Risk Officer

12. Risk Appetite Statement

IV. Risk Assessment and Quantification

13. Risk–control self assessments (RCSAs)

14. Risk quantification models

V. Risk Management

15. Strategic Risk Management

16. Risk–Based Performance Management

VI. Risk Monitoring and Reporting

17. Integration of KPIs and KRIs

18. ERM Dashboard Reporting

19. Feedback Loops

VII. Additional ERM Templates and Outlines

20. Additional ERM Templates and Outlines

About the Author

Index

JAMES LAM is president of James Lam & Associates, a risk management consulting firm. He serves on the board of directors of E∗TRADE Financial and chairs the Risk Oversight Committee. An NACD Board Leadership Fellow, he is author of the bestselling risk management title, Enterprise Risk Management.