The Risk Management Process

The Risk Management Process

In the 1980s and 1990s, risk managers were usually mid-level executives charged with managing exposure to all kinds of risks. That piecemeal approach has changed radically. Senior specialists now manage risk company-wide and report to the board of directors. These risk professionals steer a cohesive plan that covers market, credit and operational risk.

As part of solid general management, your organization should tailor risk management to your specific business activities. Today, risk management is critical to any firm’s success. Those who view it as secondary to general management or even as independent from it miss the point: risk management is first and foremost about sound general management. The process of managing risk includes:

• Managing corporate finance, the backbone of risk management security.
• Using best practice models for individual and corporate hedging.
• Understanding the ways risk management can add value to your corporation.
• Working with the basic principles of ex ante risk-adjusted capital allocation.
• Managing risk tactically with insurance, securities, derivatives and other ...