Triple Bottom Line Risk Management Enhancing Profit, Environmental Performance, and Community Benefits

by Bowden, Adrian R.; Lane, Malcolm R.; Martin, Julia H.

• ISBN13: 9780471415572
• ISBN10: 047141557X
• Edition: 1st
• Format: Hardcover
• Copyright: 2001-07-05
• Publisher: Wiley

Summary

An innovative, new approach to risk assessment and management that will help you uncover countless opportunities for your company If a business wants to be sustainable in the twenty-first century, it should focus on the continuous improvements and potential opportunities that risk management offers. Written by risk management experts, this book will provide you with the necessary tools and guidance for the successful management of business risk so you can improve your company's triple bottom line-- the social, environmental, and financial accountability of your business. The authors introduce the RISQUE method, which was specifically developed to address a diverse range of events and issues. It offers a multifaceted approach, using a rational process, which will help you make informed, defensible risk management decisions. You'll gain a better understanding of the methodology, assumptions, advantages, and disadvantages of this approach. You'll also see how the method can be applied to specific areas within your business to reduce risk and increase opportunities. And you'll learn the necessary skills to implement a risk management process that will demonstrate commitment to triple bottom line management. To enhance the material presented, numerous case studies are included that will help you understand how to: * Select and justify the best option for a project * Determine how much additional liability you'll gain through an acquisition * Account for nonquantifiable events * Understand how much your company needs to set aside for future liabilities * Discover which asset management strategy gives you the best return * Use loss of life as a measure of risk to public safety * Calculate and report contingent liability on your balance sheet * Develop an insurance strategy based on your profile of risk

Author Biography

ADRIAN R. BOWDEN is a Senior Principal of Business Risk Strategies, a division of URS, a global full-service corporation of planners, engineers, scientists, and program managers. He has over 25 years of professional consultancy experience.<BR>

Table of Contents

Foreword	xi
Acknowledgments	xiii
Introduction	xv
Part One Risk Management	1	(32)
Risk Management Process	3	(14)
Why Manage Risk?	5	(2)
What Are the Applications of Risk Management?	7	(1)
What Is the Risk Management Process?	8	(7)
Benefits of the Process	15	(2)
Why Use Anything Other Than Quantitative Risk Assessment?	17	(16)
Qualitative Risk Assessment	18	(2)
Semiquantitative Risk Assessment	20	(2)
Quantitative Risk Assessment	22	(7)
Quantifying ``Nonquantifiable'' Events	29	(2)
Benefits of Quantitative Risk Assessment	31	(2)
Part Two RISQUE Method	33	(96)
Overview of the Risque Method	35	(6)
Role of Stakeholders	36	(2)
Risque Method Steps	38	(3)
Stage 1: Establish the Context	41	(6)
Tasks	41	(4)
Water Utility Example	45	(2)
Stage 2: Identify the Risk	47	(18)
Selection of an Expert Panel	47	(2)
The Panel Workshop	49	(8)
Documentation of the Panel Conclusions	57	(1)
Water Utility Example	57	(8)
Stage 3: Analyze the Risk	65	(28)
Quantitative Modeling Techniques	65	(1)
Monte Carlo Simulation	66	(6)
Calculate Risk Quotient	72	(2)
Generate Risk Profiles and Maps	74	(2)
Calculate Risk Cost: Threshold Method	76	(4)
Calculate Risk Cost: Chance Method	80	(2)
Application of Risk Modeling Results	82	(2)
Water Utility Example	84	(9)
Stage 4: Formulate a Risk Treatment Strategy	93	(14)
Evaluate Risks against Performance Targets	95	(1)
Determine Risk Treatment Actions	96	(1)
Develop a Risk Treatment Strategy	97	(2)
Approve Strategy for Implementation	99	(1)
Water Utility Example	99	(8)
Stage 5: Implement the Risk Treatment Strategy	107	(14)
Risk Treatment Actions	107	(1)
Risk Sharing and Risk Transfer	107	(2)
Risk Reduction	109	(2)
Risk Acceptance	111	(2)
Implementation	113	(3)
Risk Management Systems	116	(3)
Summary	119	(2)
Benefits of the Risque Method	121	(8)
Risk Management and the Risque Method	121	(1)
Financial Accountability	122	(3)
Environmental Responsibility	125	(1)
Social Responsibility	126	(3)
Part Three Selected Case Studies	129	(164)
Project Selection: Mining, Papua New Guinea	137	(26)
Background	137	(2)
Mine Waste Management Project	139	(2)
Initial Risk Assessment (1996-1997)	141	(6)
First Review Risk Assessment (1999)	147	(13)
Second Review Risk Assessment (2000)	160	(1)
Summary	160	(3)
Acquisitions: Power, United States	163	(14)
Background	163	(1)
Setting	164	(2)
Risk Identification	166	(1)
Risk Analysis	167	(4)
Bid Structure	171	(4)
Summary	175	(2)
Quantifying Intangibles: Land Development, Australia	177	(16)
Background	177	(2)
Setting	179	(3)
Risk Identification	182	(6)
Risk Analysis	188	(2)
Implementation: Cost Recovery and Responsibilities	190	(2)
Summary	192	(1)
Community Safety: Tourism, New Zealand	193	(18)
Background	193	(1)
Setting	194	(4)
Risk Identification	198	(2)
Risk Analysis	200	(10)
Summary	210	(1)
Financial Assurances: Waste Management, Australia	211	(12)
Background	211	(1)
Components of Landfill Financial Assurance	212	(2)
Risk Identification and Analysis	214	(1)
Analysis Results	214	(7)
Summary	221	(2)
Indemnity in Perpetuity: Mining, New Zealand	223	(22)
Background	223	(3)
Setting	226	(3)
Definition of ``Perpetuity''	229	(1)
Risk Identification	230	(9)
Risk Analysis	239	(4)
Implementation and Risk Reduction	243	(1)
Summary	244	(1)
Corporate Reporting and Insurance: Resources Processing, United States	245	(22)
Background	245	(3)
Risk Identification	248	(3)
Risk Analysis	251	(5)
Strategy Development	256	(6)
Disclosure: SAB 92	262	(3)
Summary	265	(2)
Asset Management: Water, New Zealand	267	(26)
Background	267	(1)
Project Setting	268	(7)
Risk Identification and Quantification	275	(7)
Risk Analysis	282	(2)
Risk Reduction Strategies	284	(7)
Summary	291	(2)
Glossary	293	(10)
Index	303