Enterprise Risk Management: From Incentives to Controls

James Lam has written a remarkably clear and relevant portrayal of how [enterprise] risk management can be used to deliver real value in any business. During the past year, I developed a course for the Executive MBA program at Villanova University. After reviewing several books on the subject, I chose this one because of its clear and comprehensive coverage of the subject matter. I would highly recommend this book to anyone with a serious interest in understanding risk management from a holistic perspective. This includes risk professionals as well as those involved in line and staff functions.

You bought Jorion, Pearson, and Hull; you slammed headfirst into the quantitative quagmire of risk management, and you may even have passed the Financial Risk Manager exam, sponsored by the Global Association of Risk Professionals, but are you prepared to become your company's "Risk Champion?" Can you explain to laymen why loss distributions are not normal? Can you illustrate the "sweet spot" in the profit/risk tradeoff? If you aren't quite there yet, pick up James Lam's new book, Enterprise Risk Management, From Incentives to Controls. It's a book you can read on the five hour flight from New York to Los Angeles, and its melodies will linger in your memory. This book has changed the way I communicate with people both in and outside the risk management profession. Read it with a highlighter in your hand, and keep the book within easy reach.

This book by James Lam provides an excellent insight into this current business strategic problem. In view of all the corporate governance coming from Sarbannes-Oxley legislation and Basel II capital pronouncements, this book provides the user with the building blocks in terms of explaining how credit, market, and operational risk all tie into the big picture of enterprise risk. The author enables one to understand these risks without getting bogged down in mathematical details. He effectively brings these risks together in terms of portfolio management and then presents the reader with some risk mitigation techniques. He goes beyond other books which just concentrate on financial institutions by bringing in energy firms and nonfinancial corporations in his concluding chapters. Lam's book is a must read for anyone considering a career in risk management. Gerald G. Wisz, Ph.D. Adjunct Associate Professor of Finance Polytechnic University, Brooklyn NY Independent Risk Management Consultant

James Lam, the founder of ERisk and the pioneer for the chief risk officer concept has penned the best and most comprehensive book yet on enterprise risk management and how this emerging business practice can add practical, measurable value to any business concerned about how risks affect performance and stakeholder value.For the first time, a true ERM expert has articulated in user friendly terms, what ERM is and how it can be applied to many different business types in many industries. This book makes clear that there is no one way to design and ERM model and that customizing it to the needs of the business will be the one way to optimize the outcomes desired.The book is well organized and starts with a section on setting the "context" for delving into risk management; outlining the framework of a comprehensive approach; showing real world applications in various industry contexts; and closing with some prognostications on the future of the practice.I highly recommend this book to all business managers who want to take risk management and their careers to the next level.

Excellent resource on Enterprise Risk Management. The author draws upon his 20 years' rich real world experience to drive the subject to home. It offers valuable insight, which is rare to find elsewhere. This book is not only up to date and comprehensive, but also particularly practical. As a risk analyst with more than 6 years experience, I highly recommend this book to those who are in this field and to those who have interests in this field.