Fundamentals of Risk Management

Ian Livsey PhD MBA
Ian Livsey is Chief Executive at the Institute of Risk Management, risk manage-
ment’s leading worldwide professional education, training and knowledge body. 
Further information about the Institute and the International Certificate is available 
from the IRM website, 
www.theirm.org
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ACknowLeDgeMents
t
he risk management profession and the expertise of risk professionals continues 
to develop in line with the ever-increasing expectations placed on risk managers 
and risk consultants. Many more organizations have appointed individuals with the 
job title chief risk officer (CRO) and this development has increased the need for 
robust professional qualifications and designations for risk management practitioners.
Given the ever-increasing complexity of the business environment, it is not
surprising that production of the fourth edition of Fundamentals of Risk Management 
became necessary, just two years after production of the third edition. The importance 
and contribution of risk management continues to increase and centres of risk
management expertise and excellence continue to thrive in all business sectors, 
whether private, public or third sector.
Lectures, seminars, special interest groups and other group meetings, as well as 
one-to-one conversations with risk specialists assisted with the updating of this 
book. It is clear that ideas and experiences related to enterprise risk management are 
continuing to expand. A wide range of risk management-related standards are
currently being drafted and/or updated and the level of knowledge and expertise 
involved in the production of these risk management standards proved to be a very 
valuable source of information for the revision of the book.
The main challenge in producing the fourth edition of this textbook has been to 
align the material in the book more closely with the syllabus of the IRM International 
Certificate in Enterprise Risk Management (ERM). When undertaking this task, I 
have received considerable help and support from colleagues at the Institute of Risk 
Management (IRM), as well as many insightful comments from risk professionals 
working as presenters and lecturers on IRM training and teaching courses.
I continue to be grateful to the large number of people who have helped with the 
development of the ideas presented and discussed in this book. I am sure that
developments in risk management will continue apace and keeping abreast of devel-
opments and enhancements to risk management theory and practice will remain a 
challenge for risk management practitioners, all of whom are seeking to bring the 
benefits of enhanced risk management to their employer and/or client organizations.
Paul Hopkin
November 2016