MGD426H5 Lecture Notes - Lecture 1: Enterprise Risk Management, Risk Management, Modern Portfolio Theory
11 May 2020
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Document Summary
In erm, the responsibility of the risk management function is broader and includes all of an organizations risks, not just hazard risk: the entire organization at all levels becomes responsible for risk management as the. Implementing erm: senior management"s commitment to successfully implement an erm program, risk management professionals must have access to data, effective communication is essential to a successful erm program. Important for risk professionals to provide and/or receive communication from various functions: organization"s with fully develop integrated erm program typically develops a communication matrix. Impediments to erm: technological deficiency, people have to receive relevant information, management needs info on all organization risks in a timely and concise manner, organization culture (with entrenched silos, perhaps the single most largest impediment to successful implementation. Basic risk measures: exposure, what"s at risk, maximum possible loss from an occurrence, volatility, greater volatility means more risk, ex. energy costs. Select all that apply and say why: exposure, volatility, time horizon, correlation.
