Management accountants must be able to define the payoffs from their organisation's risk taking, as well as identify, understand, and reduce the negative effects of everyday business risks. This book defines organisational risk taking and outlines a formal process to handle risk effectively.
The book details six steps for sound risk management
- Defining risk
- Examining your attitude toward risk
- Analysing your organisation's ability to handle risk
- Minimising a risk's exposure or downside
- Recovering quickly from a risk's negative impacts
- Expanding your knowledge so you can accept more risk with confidence
- Written for management accountants, Smart Risk Management analyses your position in the middle of the organisation-ensuring both that it does not take risks whose costs it cannot afford and that it takes enough risks to stay competitive in the evolving marketplace.
Having adequate insurance coverage is only one small piece of risk management, as this book explains. With ample examples and case studies, as well as 50 hands-on risk tools, Smart Risk Management will enhance your understanding of strategic, operational, and innovation risk and increase your value to your organisation.
Smart Risk Management: A Guide to Identifying and Calibrating Business Risks| Ron Rael (Author)| Wiley
Table of Contents
Introduction
The Ultimate Risk Taker
Exercise: What Is Your Risk IQ?
Chapter 1 What Risk Management Is and Is Not
Getting Into the Risk Mentality, Exercise: Your Risk, No Insurance Selling Allowed , Risk Is Something CFOs Often Ignore, Anything Can Go Wrong, Process for Implementing an Eective Risk Management Program, Afford the Cost, Analysis of Google’s Risk, Relationship of Risk and Risk Taking, Innovation and Risk Management, Update the Culture, Understanding the Innovative and Risk-Taking Organisation, Survival Creates Infinite Sources of Risk, Summary: Risk Is Ordinary and Expected.
Chapter 2 The Two Views of Risk
Duality of Risk, The 34,000 -Foot View, Exercise: Questions to Gauge Your Risk Tolerance, The 100-Yard View, Objective Versus Subjective Risk, Personal Risk Spectrum Tool, This Spectrum in My Life, Individual Risk Taking, Summary: Everyone Sees Risk Di erently.
Chapter 3 Your Firm’s Risk Management Plan
Five Stages of Crisis Management, Your Risk Management Program, Fraud and Risk Management, Risk Awareness Prevents Fraud, Profits and Risk Management, Risk of Financial Loss, On-Spot Information Gives Rise to Profit Potential, The Risk Champion and Risk Team, Your Business Plan Risk, Strategic Risk, Operational Risk, Innovation Risk, Practical Solutions for Managing Business Model Risk, 10½ Rules for Successful Business Risk Taking, Summary: Risk Requires a Proactive Plan.
Chapter 4 Step One—Define Risk
Exercise: Defining Risk, Taking the First Step, What You Will Discover in Step 1 , Why Defining Risk Is Necessary, Practical Solutions for Making People Aware That Risk Exists, Case Study Analysis of a Bank’s Evolving Risk Appetite, Insurance’s Inadequacy in Risk Management, Uninsurable E-Commerce Risk, Uninsurable Risk of Doing Business Across the Globe, Fostering Risk Awareness Case Studies, Analysis of a Financial Company’s Lack of Risk Awareness, Risk Awareness Tool, Summary: Importance of Step 1.
Chapter 5 Step Two—Examine Attitudes Toward Risks
Exercise: Determine Your Risk Tolerance, The Second Step, Personal Risks, The Uncertainty Domino, Motivation Behind Avoiding Risk, Lesson of Step 2, Your Firm’s Specific Definition of Risk, Exercise: Taking a Risk, The Mind-Set of the Risk Taking Entrepreneur, The Mind-Set of the Risk Averse Person, Back to Us, Case Study, Analysis of Royal Bank of Canada Revisited Risk Definition, A 10½ Step Plan to Build Your Self-Confidence for Risking, 10½ Rules of Creative Risk Taking, Exercise: Who Is Running the Train?, Summary: Importance of Step 2.
Chapter 6 Step Three—Analyse the Firm’s Ability to Handle Risk
Case Study, Analysis of Amazon’s Ability to Take Risks, Case Studies to Learn From, Exercise: Risk Analysis, Risk of Weak Accountability, Exercise: Accountability Self-Assessment, The Source of All Business Risks, Risk’s Two Faces, Accounting Sits in the Middle, The Cultural Aspect of Risk Taking and Risk Management, Your Culture Mosaic, Visible Clues About Risk in Your Culture’s Norms, Morale Is Vital in Risk Awareness, Culture Must Never Be Downplayed, Case Study, Analysis of Culture and Risk, Risk Analysis Tools, Tools of Risk Identification, Tool for Breaking Down a Risk Into Manageable Actions, Exercise: What Would You Need?, Exercise: Givens, Negotiables, and Controllables, In Essence, A Culture That Balances Risk Taking and Risk Exposure, The Point, How to Generate a Balanced Risk Taking Culture, Culture’s Impact on Risk Taking, Risk Inherent in Your Culture, Walk in My Shoes, Summary: Importance of Step 3.
Chapter 7 Step Four—Minimise the Risk Exposure
Risk Mitigation Tools, Exercise: Risk Strategy Grid, Proactive Attitudes, Importance of Step 4, Balanced Risk Taking Requires Employees Thinking for Themselves, Tool to Perform an Authority and Responsibility Analysis, Tool to Analyse the Causes of Exposure, The Real Risk, Exercise: Finding the Root Cause, Tool for Isolating the Optimal Solutions, Summary: Importance of Step 4.
Chapter 8 Step Five—Recover From the Negative Results
Risk Recovery Tools, Tool for Pitfall Planning, Exercise: Risk Analysis, Contingency Funds in Risk Management, Tool for Fostering a Lessons Learned Attitude, Exercise: Lessons Learned,The Risk Audit, Tool for Continuous Learning, Case Study, Analysis of Mega-Retailer’s Growing Risk, CEO Lessons Learned, Summary: The Importance of Step 5.
Chapter 9 Step Five½—Commit to Taking Action
The (Never Completed) Last Step, Action Plan: Tool for Planning for Risks, Tool for Action Plan Reporting and Accountability, Summary: The Importance of Step 5½.
Chapter 10 Risk Management and the Management Accountant
The Demand for Our Risk Awareness, Inherent Risk, Control Risk, Assertion, Detection Risk, Risk and Path of Least Resistance, Where Auditors Need to Look, Ways to Alter Employee’s Path of Least Resistance.
Chapter 11 The Wide World of Risks
Risk in Weather, Risk in Geopolitics, Risk From People Resources, Risk From Fraud and Employee Abuses, Warning Signs of Situations at Risk for Unethical Behaviours, Risk in Your Static Rewards, Risk in Employment Compliance, Risk in the Technology Dependent Age, Risk in Information Security, E-Commerce Risk, Risk of Sabotage, Risk to Personal Data, Risk in E-Mail, Risk in Internet Privacy, Risk of Internet Rumours, Summary: The Importance of These Risks.
Appendix A Tool for Culture Risk Assessment
Pressure Point No1: The Growth Factor Pressure Point No2: The Corporate Culture Pressure Point No3: The Management of Information 103
Appendix B Ethics Focus: Business and Industry
Ethics Overview Key Ethical Dilemmas Glossary of Controllership and Financial Management Terms
LINK FOR THE BOOK
