Pages: 60

No chapter abstract available.

Pages: 16

The varied and increasing types of risks and uncertainties to which companies are exposed necessitate more advanced risk management approaches characterised by the use of sophisticated risk management tools. As a result, risk management has evolved from a narrow, siloed view of risk to a holistic view encompassing multiple risks and their interactions. This paved the way for enterprise risk management (ERM) to emerge as a strategic approach to managing risks affecting an organisation's ability to achieve its objectives, as well as a key aspect of corporate governance. In this chapter, the authors offer an overview of risk management and ERM. The chapter differentiates between risk and uncertainty, and covers the evolution of risk management in both practice and research. “An introduction to ERM” also draws attention to the concept and frameworks of ERM, and the anticipated ERM benefits.

Pages: 19

In this chapter, the authors cover the factors affecting the adoption and design of enterprise risk management (ERM), and the different aspects that influence the form of ERM that emerges. The decision to implement ERM is often taken in the presence of complex and interrelated external and internal drivers for change. These drivers include, but are not limited to, regulations, new and complex risks and uncertainties, strategic objectives, and advancements in technologies. The chapter also provides an overview of the latest developments in ERM research, outlining important themes that have been the focus of risk management research. The authors illustrate that there is a noticeable trend where the behavioural and cognitive aspects of ERM integration are beginning to emerge in research, providing fertile ground for increasing the understanding of ERM as a process. “ERM implementation” concludes that despite several calls for accounting and management scholars to devote more attention to the behavioural and cognitive dimensions of ERM process integration, there has been a scarcity of research conducted thus far in this domain.

Pages: 13

In this chapter, the authors provide an examination of the issues in relation to the introduction of risk artefacts. The chapter discusses the technical and social tensions that can emerge as a result of implementing risk artefacts. It also takes a closer look at the interactions between risk artefacts and human actors. “challenges and dynamics of the implementation process” further delves into the knowledge role of risk artefacts. The design and functionality of risk artefacts affect the degree to which they are likely to influence the judgements that individual and distributed actors make. So too does the risk culture, which can promote or downplay the value of human judgements. The chapter concludes that the introduction and use of risk artefacts is an important facet of enterprise risk management (ERM) implementation, and the literature demonstrates just how significant the influence of culture and cognition is on risk artefact design, reconfiguration, and use.

Pages: 10

In this chapter, the authors investigate the issues related to new approaches to risk management and the cognitive demands that complex, systemic, and multidimensional challenges impose. It discusses how research is shifting towards a cognitive turn and provides an overview of how cognition is examined in enterprise risk management (ERM) research. The chapter also investigates cognition in the context of growing uncertainty. Organisations’ risk universe is shifting from one preoccupied with financial risks to one concerned with existential risks and uncertainties. While there is growing optimism that emerging technologies can help mitigate many of these risks and uncertainties, particularly those related to environmental sustainability, this optimism is often based on a misunderstanding of the potential benefits and limitations of those technologies when applied to single, well-defined risks and systemic, ill-defined uncertainties. “New risk approaches, new cognitive demands” concludes with considerations of the cognitive demands of risk work and human cognition in decision-making.

Pages: 48

No chapter abstract available.

Pages: 11

In this chapter, the authors provide the reader with a practitioner's perspective on risk tools and toolmaking, which is an important feature of enterprise risk management (ERM) adoption and implementation, given that ERM is a tool-rich process. Prior to delving into practitioners’ perspectives on risk tools, the chapter offers an overview of the case companies in terms of some of the decisive factors that led them to adopt and implement ERM, as well as how those factors have shaped their risk governance frameworks. The chapter also provides the reader with an overview of the perspectives of risk practitioners regarding the design and implementation of risk tools. “Tools and toolmaking” further takes a closer look at the challenges, strategies, and anticipated outcomes of risk tool implementation.

Pages: 11

In this chapter, the authors provide the reader with a practitioner's perspective on the social dynamics of risk management, which can affect the capacity of enterprise risk management (ERM) to influence decision-making, given that ERM is a tool-rich process that is also characterised by continuous social interactions among diverse groups of experts, i.e., risk managers and other professionals. The chapter provides the reader with an overview of the relationship dynamics between risk managers and other professionals. It also offers an overview of the role of ERM and risk tools in decision-making, highlighting the social aspects. “The social dynamics of ERM” concludes with insights on the way risk tools should be defined and their remit, given that what is perceived as a risk tool (e.g., tools based on social interactions) does not necessarily reflect the typical risk tools promoted by ERM frameworks.

Pages: 10

In this chapter, the authors provide the reader with a practitioner's perspective on the significance of enterprise risk management (ERM) in fostering dynamic capabilities and knowledge management. The chapter offers an overview of ERM and knowledge integration, focusing on the technical aspects and social factors supporting knowledge integration. It also provides an overview of the role ERM plays in knowledge management. “Knowledge management” therefore draws attention to the importance of knowledge management for ERM integration, considering the challenges organisations experience when implementing ERM. While knowledge integration is often viewed as a technical capability, the authors extend that view to include social factors that make knowledge integration and management possible. The chapter concludes with considerations for enhanced ERM capability and knowledge integration and management.

Pages: 7

In this chapter, “ERM and cognition”, the authors focus on human cognition, drawing on insights gained from the literature and from the case companies to discuss how enterprise risk management (ERM) is changing the way actors “think” and subsequently “act” as they incorporate new risk information and knowledge into their judgements and decisions in their daily work. The chapter, therefore, draws attention to ERM as a catalyst for cognitive change. In addition, the chapter discusses the current limitations as well as the future opportunities for risk tools to improve judgements used in decision-making and if and how their usability can be extended into situations characterised by strategic uncertainty. “ERM and cognition” therefore draws attention to risk tools as an impediment or facilitator of cognitive capabilities.

Pages: 7

This chapter synthesises the insights gained from the identification, discussion, and extension of key themes related to the technical, social, and cognitive factors that are critical to the successful implementation of enterprise risk management (ERM). “A look to the future” provides the reader with an overview of what we introduce as “ERM: An integrated technical, social, and cognitive approach”. In doing so, the authors discuss several key areas that should be of interest to practitioners as they engage in ERM implementation work and efforts to improve the capability of ERM to contribute to the realisation of strategic and performance goals. The chapter draws attention to changes in strategic goals with respect to environmental, social, and governance (ESG) risks, and while there is some indication of this in the literature, these goals are (arguably) broadening now for all organisations. The chapter also identifies several avenues for future research, which are expected to add to our knowledge of ERM.