Risk has far-reaching implications, both financial and non-financial. To select the proper mode of treatment, each business unit must assess the risk in terms of its impact on attaining the strategic objectives in both monetary and non-monetary terms. The amount to which major risks are discovered, measured, and correctly managed utilizing the optimal combination of risk treatment procedures determines the organization's success in meeting its objectives.
Climate change, technology and other emerging risks have
increased the complexity of risk frequency and severity trends, necessitating
the adoption of complicated approaches involving artificial intelligence and
machine learning in their assessment in order to apply the right treatment
method.
The purpose of this book is to provide a critical analysis
of risk theory and risk management. The book is divided into eight chapters
with sections and subsections. Chapter 1 explores the company's key
dependencies, core processes, stakeholder expectations, business and strategic
objectives, and the risks associated with them. It also looks at the company's
risk culture, risk attitude, risk profile, risk capacity, and risk appetite. It
highlights the components of risk and the risk spectrum in relation to the
level of knowledge about the future situation of an event to occur.
A thorough review of decision theory is given in Chapter 2,
which also examines its models, foundations, and real-world applications.
Real-world case studies are used to analyse decision-making contexts, criteria,
and processes, highlighting the importance of decision theory in making
well-informed decisions. Readers may properly examine complex decision-making
scenarios thanks to the discussion of key concepts, theories, and tools. This
chapter gives decision-makers the information and abilities they need to make
wise decisions by fusing theoretical frameworks with real-world insights.
The third chapter explores the problems and logic behind
risk classification. The significance of the primary risk categories—financial
and non-financial, strategic, tactical, operational, and compliance risks,
systemic and non-systemic risks, particular and fundamental risks, and
insurable and non-insurable risks—is evaluated. The tenets and reasoning behind
risk classification schemes are thoroughly investigated. There is a thorough
discussion of the risks, challenges, and limitations of risk taxonomy.
The effects of risk, both financial and non-financial, are
examined in Chapter 4. In order to model hazards, it looks at risk measures,
discrete and continuous loss distribution functions, and the characteristics of
probability distribution functions. Both individual and collective risk models
are evaluated. Parameter estimations and goodness-of-fit tests are thoroughly
examined in this presentation of the risk modelling approach for insurance
claims. The application of machine learning and artificial intelligence to risk
assessment and management is examined in this chapter.
The concept of risk management and the risk management
method are examined from a number of angles in Chapter 5. In-depth research is
done on risk assessment, measurement, and treatment techniques. There is also
discussion of various methods for communicating and reporting hazards. A
detailed description of the risk management framework and its elements is
provided. The chapter concludes with an analysis of risk management performance
after going over the fundamentals of risk management and the justifications for
engaging in risk management activities. Tools for identification, risk
assessments, and risk management strategies are thoroughly examined.
Additionally, risk management guidelines are provided.
In order to respond to a crisis and lessen its effects,
Chapter 6 looks at the creation of business continuity plans, crisis management
plans, incident management plans, and disaster recovery plans. The chapter
discusses business dependencies and vulnerabilities, the lifecycle of business
continuity management, the causes of business discontinuity, and its effects.
Additionally, it looks at and creates strategies for resilience and disaster
recovery, incident and crisis management, and the life cycle of business
continuity management. The structure and requirements for business continuity
are thoroughly reviewed.
The ideas, tenets, perspectives, and importance of risk
management are examined in Chapter 7. It discusses financial developments in
derivative products as well as the evolution of risk management from active to
proactive approaches. It looks at how technological development and climate
change affect risk management initiatives.
Finally, chapter 8 examines corporate governance concepts
and the development of a corporation. It looks at stakeholders and how they
relate to the company. It examines the roles played by the board of directors,
risk managers, and auditors, among other components of the governance system.
There is extensive discussion on the nature, tenets, standards, and objectives
of the corporate governance code.
This book is intended for third-year students pursuing
bachelor's degree and master's degrees students in risk management, and
insurance. If they want to brush up on their knowledge, risk management
practitioners and professionals will also find this book to be helpful.
Author (s) Details
Mussa Charles Juma
Institute of Finance Management, Tanzania.
Please see the book here:- https://doi.org/10.9734/bpi/mono/978-93-48859-53-2
No comments:
Post a Comment