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The Risk Management Process

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The Risk Management Process

Business Strategy and Tactics

Wiley,

15 min read
10 take-aways
Text available

What's inside?

Risk energizes companies, but such power surges can be hazardous. Here’s how to protect yourself from getting zapped by using strategic risk management.

Editorial Rating

8

Qualities

  • Applicable

Recommendation

Christopher Culp definitively combines a thorough reference work on company-wide risk management with a sweeping discussion of the best hedging practices. Since this is also a textbook, you’ll find the kind of math that would make even Einstein sweat. But, as the author notes, he’s written this book for senior managers, so you have a note from the teacher that you can skip the math and statistics if you have a staff for that. Instead, apply your executive thinking skills to absorbing Culp’s excellent lessons in risk management theory and practice. getAbstract.com recommends this book to senior managers and directors - in other words, any executives who create, implement or supervise risk management strategies.

Summary

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 ...

About the Author

Christopher L. Culp is Managing Director at CP Risk Management LLC in Chicago and is an Adjunct Associate Professor of Finance at the University of Chicago. A former President of Risk Management Counseling Services, Inc., and senior examiner in the Supervision and Regulation Department of the Federal Reserve Bank of Chicago, Dr. Culp is a managing editor of Derivatives Quarterl and Senior Fellow in Financial Regulation with the Competitive Enterprise Institute in Washington, D.C. He holds a Ph.D. in finance from the Graduate School of Business of the University of Chicago and a B.A. in economics from Johns Hopkins University.

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