Managing Risk and Performance – A Guide for Government Decision Makers

<p>Foreword xv</p>
<p>Preface xvii</p>
<p>PART One</p>
<p>Introduction and Overview</p>
<p>CHAPTER 1</p>
<p>Managing Risk of Federal Agencies and Their Programs through Enterprise Risk Management 3<br /> Thomas H. Stanton</p>
<p>Risk Management as an Essential Part of Federal Management 3</p>
<p>Risk Management as an Integral Part of Good Decision Making 5</p>
<p>The Unique Challenges of Managing a Government Agency 6</p>
<p>Establishing Effective Risk Management 8</p>
<p>Managing Risk in Government Agencies: Overview of the Book 11</p>
<p>References 16</p>
<p>CHAPTER 2</p>
<p>The Need for Effective Risk Management 17<br /> Douglas W. Webster</p>
<p>Defining Risk 18</p>
<p>The Source of Uncertainty: Change 20</p>
<p>Risk and Reward 22</p>
<p>The Risk Management Process 23</p>
<p>The Essence of Organizational Success: Stakeholder Value 29</p>
<p>The Role of Information Technology in Risk Management 31</p>
<p>The Importance of Organizational Change Management 31</p>
<p>Putting It All Together 32</p>
<p>Conclusion 33</p>
<p>References 34</p>
<p>CHAPTER 3</p>
<p>Introduction to Risk Management for Government Managers 35<br /> Thomas H. Stanton</p>
<p>Fitting Risk Management into an Organization 36</p>
<p>Promising Practices in Risk Management 45</p>
<p>Observations about Risk Management in Government: What Works and What Doesn t 54</p>
<p>Conclusion 60</p>
<p>References 60</p>
<p>CHAPTER 4</p>
<p>Risk Management and Challenges of Managing in the Public Sector 63<br /> Paul L. Posner,Thomas H. Stanton</p>
<p>Unique Risk Management Challenges of Public Programs 65</p>
<p>Third–Party Governance: The Challenge of Managing Risk across Organizational Boundaries 68</p>
<p>Goal Setting, Accountability, and Prioritization of Risks 77</p>
<p>Concluding Observations 81</p>
<p>References 83</p>
<p>CHAPTER 5</p>
<p>Creating and Keeping Your Options Open It s Fundamental 87<br /> Brian Barnier</p>
<p>The Real World Is Rarely Simple and Stable 87</p>
<p>Systems Set the Stage 88</p>
<p>Managing More Easily Options in Time 89</p>
<p>Examples of Options in Time in Practice 95</p>
<p>Conclusion 110</p>
<p>Key Points 111</p>
<p>References 111</p>
<p>PART Two</p>
<p>Moving toward Enterprise Risk Management</p>
<p>CHAPTER 6</p>
<p>Introduction to Enterprise Risk Management for Government Managers 115<br /> Douglas W. Webster</p>
<p>Shortcomings of Traditional Risk Management 116</p>
<p>The Impact of Managing Risk within Silos a Case Study 119</p>
<p>The Maturation of Traditional Risk Management into Enterprise Risk Management 121</p>
<p>Key Principles of Enterprise Risk Management 126</p>
<p>What Enterprise Risk Management Is Not 129</p>
<p>The Payoff 133</p>
<p>Summary 134</p>
<p>References 136</p>
<p>CHAPTER 7</p>
<p>Implementation of Enterprise Risk Management at the Office of Federal Student Aid of the U.S. Department of Education 137<br /> Fred Anderson, Cynthia Jaspers Vitters</p>
<p>Overview of FSA 138</p>
<p>Initial Implementation of ERM at FSA 140</p>
<p>Initial Activities and Challenges in Implementing Enterprise Risk Management at FSA 142</p>
<p>Expanding the ERM Program a Change in FSA s Business Model 144</p>
<p>Key Considerations and Challenges When Implementing the Expanded ERM Program at FSA 148</p>
<p>Conclusion 158</p>
<p>References 159</p>
<p>Acknowledgments 160</p>
<p>CHAPTER 8</p>
<p>Integrating Enterprise Risk Management with Strategic Planning and Resource Management 161<br /> Jeffrey Stagnitti</p>
<p>Context 161</p>
<p>Enterprise Risk Management and Strategy 167</p>
<p>Enterprise Risk Management and Resource Management 170</p>
<p>Conclusion 172</p>
<p>CHAPTER 9<br /> <br /> Building Enterprise Risk Management into Agency Processes and Culture 175<br /> John Fraser</p>
<p>Building a Shared Understanding of Risks through Conversations 177</p>
<p>The Key Enterprise Risk Management Techniques 184</p>
<p>Improved Decision Making and Prioritization 188</p>
<p>Conclusion 191</p>
<p>References 192</p>
<p>For Further Reading 192</p>
<p>Appendix: Hydro One Inc. Enterprise Risk Management Policy 193</p>
<p>PART Three</p>
<p>Special Topics in Risk Management and Response</p>
<p>CHAPTER 10</p>
<p>Risk Management and the Dynamics of Budget Cuts 199<br /> Thomas H. Stanton</p>
<p>The Dynamics of Protracted Budget Controversy and the Risk and Uncertainty They Create 200</p>
<p>Long–Term Budget Cuts and the Risks They Create 203</p>
<p>The Role of Risk Management in Reducing Chances of a Major Mishap 207</p>
<p>Strengthening Agencies Ability to Deal Effectively with Budget Pressures 215</p>
<p>Conclusion 217</p>
<p>References 217</p>
<p>CHAPTER 11</p>
<p>Managing Reputational Risk 219<br /> Gary L. Glickman</p>
<p>What Is Reputational Risk and What Does It Mean to Government? 221</p>
<p>What Determines Reputation and How Can Government Address These Factors? 223</p>
<p>External Influences on Reputation 229</p>
<p>Consequences of Reputational Loss for Government Organizations 231</p>
<p>Reputational Risk Mitigation 235</p>
<p>Conclusion 239</p>
<p>References 240</p>
<p>CHAPTER 12</p>
<p>Risk Management and Decision Making: Lessons from the Financial Crisis for Federal Managers 243<br /> Thomas H. Stanton</p>
<p>The Financial Crisis: How It Emerged, What Happened, and the Costs 245</p>
<p>Decision Making at Firms That Failed: Common Shortcomings 248</p>
<p>Decision Making at Firms That Succeeded: The Importance of Culture 252</p>
<p>Lessons in Governance, Risk Management, and Decision Making 258</p>
<p>Conclusion 264</p>
<p>References 265</p>
<p>PART Four</p>
<p>Conclusion</p>
<p>CHAPTER 13</p>
<p>Effective Enterprise Risk Management: Mapping the Path Forward 269<br /> Douglas Webster</p>
<p>Recommendations 270</p>
<p>Conclusion 290</p>
<p>References 291</p>
<p>For Further Information 292</p>
<p>For Further Reading 292</p>
<p>About the Editors 293</p>
<p>About the Contributors 295</p>
<p>Index 299</p>