Managing Business Risk: A Practical Guide To Protecting Your Business

MANAGING BUSINESS RISK This page intentionally left blank ii MANAGING BUSINESS RISK a practical guide to protecting your business fourth edition consultant editor: jonathan reuvid Recommended by the Institute of Risk Management London and Philadelphia Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors. First published in Great Britain and the United States in 2003 by Kogan Page Limited Second edition 2005 Third edition 2006 This edition 2007 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road London N1 9JN United Kingdom www.kogan-page.co.uk 525 South 4th Street, #241 Philadelphia PA 19147 USA © Kogan Page and Contributors, 2003, 2005, 2006, 2007 ISBN-10 ISBN-13 0 7494 4949 7 978 0 7494 4949 0 The views expressed in this book are those of the authors, and are not necessarily the same as those of the Institute of Risk Management British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Managing business risk : a practical guide to protecting your business / Jonathan Reuvid, [consulting editor]. – 4th ed. p. cm. Recommended by Institute of Risk Management. ISBN-13: 978-0-7494-4949-0 ISBN-10: 0-7494-4949-7 1. Risk management. I. Institute of Risk Management. II. Reuvid, Jonathan. HD61.M26 2007 658.15’5–dc22 2007001960 Typeset by JS Typesetting Ltd, Porthcawl, Mid Glamorgan Printed and bound in Great Britain by Cambridge University Press This page intentionally left blank v This page intentionally left blank vi This page intentionally left blank vii This page intentionally left blank viii This page intentionally left blank ix This page intentionally left blank x This page intentionally left blank xi This page intentionally left blank xii This page intentionally left blank xiii This page intentionally left blank xiv Contents Foreword by Steve Fowler, CEO, Institute of Risk Management Contributors’ notes Introduction xxv xxviii 1 Part 1: Risk Management Strategy and Corporate Governance 1.1 Evolution in risk management Marie-Gemma Dequae, Federation of European Risk Management Associations (FERMA) Standards 7; European dir