Topic 2 notes.docx

Topic 2 notes.docx - Topic 2 notes Topic 2 The Risk...

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Topic 2 notes Topic 2: The Risk Management Process 1. Decision-Making Process Manage Pure Risk events or activities facing a firm or organization o TRM managing pure risk (loss/no loss situations) ‘series of steps’ Use a risk management decision-making process 2. Functional Area of a Firm or Organization ‘risk manager’ for company o Make use of RM decision-making process Specialized branch of financial management 3. Evolution of RM Over Time 1950’s-60’s: firms did not really manage risk, they purchased insurance Early 1960’s: H. Wayne Snider – professor at Temple o Firms need to make strategic move from insurance buying to managing risk Coined term “risk management” o Temple is considered to be birthplace of RM as a concept 1960: firms engaging in insurance management (just buying insurance), narrow and non- strategic Present: managing risk in a more strategic way o David Holmquist: “we do not buy any insurance at all” for LA school district Can manage risk without buying insurance Reducing cost of risk increasing firm value, many firms now have a CRO (Chief Risk Officer) The RM Process E.g. Scott Bendzlowicz former Fox RMI major, crazy but smart guy Headhunter (job finder) Richard Meyers calls for United Retail for a Risk Manager with no experience requirement
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  • Spring '10
  • GARY
  • Management, risk management process, RM decision-making process

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