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Enterprise Risk Management

Creating shareholder value is management's primary job – and sometimes that means taking the risks that your risk management team would rather avoid. SDG's focus on Enterprise Risk Management as a means to creating shareholder value, and as a support to management decisions, distinguishes us from other ERM practitioners.

With traditional ERM approaches, it’s easy to get lost in the details. Most "compliance-centric" ERM focuses on control, on auditing, and on the unfortunate events with negative impacts on your business. Those are important, but they miss the far larger uncertainties in how you create value for your shareholders over next five, 10, or 20 years.

Corporate leaders rightly focus their primary efforts on creating and delivering shareholder value; a few senior executives have recognized the importance of protecting shareholder value through world-class, strategic Enterprise Risk Management (ERM).

But what can ERM do for your company? And why should it be important enough to do something about?

Risks and uncertainty are facts of life. What will competitors do? Where will market pricing trends go? What will happen with the economy? And which products or services should your company push to remain successful in an ever-changing competitive and economic environment?

You grapple with these kinds of questions every day, and with the risks bearing on what the best answers are. You know your company faces many risks, but which ones are most important, and what should you do about them?

Value-Driven ERM

That’s why SDG focuses on Value-Driven ERM: understanding and dealing with the uncertainties bearing on future value creation. Because you must build new, successful businesses before they can be helped by the value-protection focus of traditional ERM.

SDG has a practical and proven method for identifying excessive risk exposure, developing solutions to manage enterprise risk, and recommending appropriate roles for the board, senior executives, chief risk officers, and line executives in protecting shareholder value. Our focus on ERM as a means to creating shareholder value distinguishes us from other ERM practitioners. Because we feel that creating shareholder value is management’s primary job, and ERM should support that.

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Stanford Certificate

ERM is one of 13 courses offered in the Stanford Certificate Program in Strategic Decision and Risk Management. 

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Executive eBriefing

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Replay our 60-minute webinar: What Boards and Senior Executives Want Most from Their Enterprise Risk Programs. 

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Value-Adjusted Risk

SDG has made freely available its Excel-based tool for calculating the risk-adjusted value of an uncertain venture. Click to download a spreadsheet containing SDG's risk-adjusted value function. 

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