A new approach to risk management. (Books).

RISK MANAGEMENT IS APPEARING MORE AND more as a key topic of conferences and literature targeted at both public- and private-sector entities. Given the increased uncertainty in the world today, many businesses are looking for new ways to view and manage the age-old problem of risk. Enterprise

risk management, integrated risk management, and holistic risk management are just a few examples of this new generation of risk management strategies. The authors of Triple Bottom Line Risk Management, Adrian Bowden, Malcolm Lane, and Julia Martin, contend that, from an opportunistic perspective, successful management of business risk has the vast potential to improve the so-called triple bottom line-the social, environmental, and financial accountability of a firm.

The aim of this John Wiley & Sons publication is to illustrate current risk management approaches and to demonstrate the use of a rational, quantitative method for the development of risk management strategies. Targeted users of this book include business managers involved in strategic planning, policy makers, regulators, consultants, and students of strategic management and finance.

The authors' primary focus is the Risk Identification and Strategy Using Quantitative Evaluation (RISQUE) method, an approach to risk management they developed in their professional practice.

The RISQUE methodology was developed specifically in response to the recognized need to translate complex, technical, triplebottom-line information into financial terms.

Part One of the book discusses basic concepts of risk management and provides an interesting look at quantitive vs. qualitative risk assessment. Even though the RISQUE method championed by the authors is based on quantifyin "nonquantifiable" events, the comparison of the two approaches to risk assessment are fair and balanced.

A detailed explanation of the RISQUE methodology follows in Part Two. Neither the steps taken nor the quantitative methods involved in the RISQUE process are new. Monte Carlo simulation, risk mapping, and likelihood analysis are some examples of the familiar statistical techniques utilized.

This strategic risk management approach contributes an application of techniques designed to quantify risks associated with aspects such as community outcry, business reputation, legal culpability, and environmental impacts. These techniques include the generation of financial expressions of risk, risk profiles, and benefit-cost relationships. Another unique feature of the RISQUE method is the inclusion of stakeholder representation throughout the procedure. These stakeholders may include a project manager, community representatives, and specialist technical experts. The end of each chapter in this section illustrates key RISQUE elements by referring to an actual project carried out by a water utility.

Part Three includes eight case studies where the RISQUE method was used. The questions addressed in these case studies cover a wide range of circumstances, including project selection, acquisitions, quantifying intangibles, community safety, and asset management.

In general, though some parts of the book bear a resemblance to an infomercial in their enthusiasm for the RISQUE method, there are some strong points to this 301-page effort. The reader is encouraged to approach risk management from a nontraditional perspective. In addition, the book is replete with case studies that implement the steps discussed

The best risk management systems are specifically designed to fit comfortably within the business structure, activities, and ethos. This book contends that through use of the RISQUE approach, risk management can be inherent in all decision-making implementation, reporting, and auditing processes.