Fundamentals of Risk Management

Changes for the fourth edition
Risk management continues to be a dynamic and developing discipline and the 
changes that were necessary in the production of the fourth edition of this book
reflect that fact. Certain types of risk have increased dramatically and the need for a 
robust ERM to be adopted by organizations has never been greater. Risks that have 
increased considerably since the third edition of this book include the global
phenomenon of youth unemployment, the increasing level of political instability in 

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Introduction
9
the world, the increasing number of incidents associated with climate change, and 
the increasingly sophisticated levels of cyber-crime.
Changes to the textbook include amendments to ensure that the contents remain 
relevant in an increasingly uncertain world, and increasingly complex business
environment. Several chapters required substantial updating to accommodate the 
developments in risk management over the past two years. In particular, Part Two 
consolidates the chapters concerned with the different approaches to risk management 
and includes consideration of risk management standards, outlines the importance 
of establishing the context and considers ERM in detail in Chapter 8.
The opportunity has also been taken to provide more information on establishing 
the context, by a more detailed analysis of the external and internal context of an 
organization in Chapter 7, together with discussion of the risk management context 
in Chapter 21. Also, there has been greater use of case studies in the fourth edition 
with three different case studies included in each of the eight parts of the book. The 
case studies have been selected to provide examples of good practice in risk management 
by various companies around the world.
One of the most important considerations in producing the fourth edition was to 
more closely align the order of the chapters in the textbook with the structure of the 
Institute of Risk Management (IRM) International Certificate in Enterprise Risk 
Management (ERM). Accordingly, the first four parts of the fourth edition are
concerned with the basic principles of risk and risk management. Parts Five through 
to Eight are concerned with the practice of risk management and include consideration 
of risk strategy, culture, governance and assurance. Aligning the structure of the 
fourth edition with the IRM international certificate has provided a better structured 
order in which to present the technical content.

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