Risk management is a fundamental part of any business. Risk management includes carrying out decisions that minimize the risks associated with various aspects of a business.
There are several reasons why a business might want to manage its risks. These reasons may include saving resources, protecting its goodwill or brand, protecting its stakeholders, preventing legal disputes or even protecting the environment.
The responsibility to manage the risks of a business falls on its management. Usually, risk management starts at a strategic level and breaks down to compensate for the operational needs of a business. It means that all levels of management will take part in its risk management.
Therefore, managers must understand the concept of risk management. Similarly, managers need to read actual cases of risk management to get a better understanding and develop an idea of how to apply risk management practically.
While there are many ways to gain knowledge related to risk management, the best way is to acquire it from books. There are many books that managers can use to obtain knowledge about risk management. A list of the five best business risk management books is as below.
1) Against the Gods: The Remarkable Story of Risk
Against the Gods is one of the best books regarding risk management. It is a Business Week, New York Times Business and USA Today Bestseller written by Peter L. Bernstein, who was a financial historian, economist and educator.
The book examines the study and the notion of risk completely. The book is divided into five different eras and describes the concept of risk and risk management in those times.
It also gives details about how probability and statistics came to be known and understood. Overall, the book is a superb read for managers who want to learn the history of risk management and how it has evolved.
2) The Essentials of Risk Management, Second Edition
The Essentials of Risk Management is a book written by Michel Crouhy, Dan Gali and Robert Mark. The book is a great read as it describes the basics of risk management in easy-to-understand language and focuses on both professional and non-professional readers.
Furthermore, the book provides the latest methods for measuring and transferring credit risks, increasing the transparency of risk management within a business and implementing an Enterprise Risk Management approach throughout the business.
Apart from these, the book also explains transition and introduces the new regulatory framework. It also discusses other topics such as corporate governance, stress testing, scenario analysis and much more.
3) Risk Management and Financial Institutions (Wiley Finance)
Risk Management and Financial Institutions, written by John C. Hull, is another great book that discusses all aspects of financial risks and financial institution regulation. The book can help readers better understand the financial markets and their associated risks.
It also contains information about how various financial institutions perceive risk and their approach to risk management. Furthermore, it describes the most current regulatory issues that deal with risk.
The book focuses on all levels of readers, whether they are beginners or professionals in the field. Overall, the book is an excellent read for managers looking to deepen their knowledge of risk management.
4) Financial Risk Management For Dummies
Financial Risk Management for Dummies is a part of the great “For Dummies” book series. The writer of the book is Aaron Brown, who is a bestselling and well-known risk management writer.
The book is concise but still manages to discuss all the key aspects of risk management, which includes measuring, managing and communicating risks within a financial organization.
The book also covers working as a financial risk manager and helps managers develop their own risk management strategies.
The book focuses on readers of all levels, but it does not mean that there is nothing for professional managers in it. Overall, the book is one of the best books out there that discuss financial risk management.
5) Thinking, Fast and Slow
Thinking, Fast and Slow is a book written by Daniel Kahneman. The book is a Major New York Time bestseller with over 2 million copies sold worldwide. The book is also available in many different languages.
The book discusses two different ways of thinking, fast and slow and how these can affect the decision-making process of a business.
The book also explains the concept of cognitive biases and how it can affect economics, stocks markets, risk assessment, among other things. While the book is not a typical risk management book, it is a highly recommended read for managers of all levels.
Risk management is a crucial part of any business. The responsibility for risk management ultimately goes to the managers of a business.
Therefore, managers must understand the concept of risk management as it is necessary for all levels of management, starting from the strategic level down to the operational level.
The best way to get started with risk management is by reading books. Managers can choose from a list of the five best business risk management books given above.