Certification Programme Knowledge Only v1

European Certification for Risk Managers
Body of Knowledge
1
2015 FERMA - CONFIDENTIAL - All rights reserved - Copying and forwarding is not permitted
CONTENT
Program Design: Blocks ...................................................................... 5
Block Description ............................................................................... 7
Block 00: Business Basis for Risk Manager ........................................................... 7
Block 01: Essentials of Risk Management ............................................................. 8
Block 02: Risk Assessment .................................................................................... 9
Block 03: Risk Treatment I .................................................................................. 10
Block 04: Risk Treatment II ................................................................................. 11
Block 05: Risk Communication, Monitoring & Review ........................................ 12
Block 06: Specific Risk Management Topics ....................................................... 13
Learning Outcomes .......................................................................... 14

Block 00: Business Basis for Risk Manager......................................................... 14
TOPIC 1: Essentials Of Economics And International Business ........................................................................... 14
TOPIC 2: Basic Statistics & Financial Mathematics ............................................................................................. 14
TOPIC 3: Basic Corporate Finance ...................................................................................................................... 14
TOPIC 4: Financial Statements ............................................................................................................................ 15
TOPIC 5: Basic of General Management.............................................................................................................. 15
TOPIC 6: Legal & Contract Management ............................................................................................................. 16
TOPIC 7: Basic Marketing .................................................................................................................................... 16
TOPIC 8: Communication .................................................................................................................................... 16
TOPIC 9: Information Technology ....................................................................................................................... 17
TOPIC 10: Change Management ......................................................................................................................... 17
Block 01: Essentials of Risk Management (COMPULSORY) ................................ 18

2
TOPIC 1: Introduction to FERMA Risk Manager Certification (4 Pillars System) ................................................ 18

TOPIC 2: Principles and Aims of Enterprise-Wide Risk Management (Includes Ethics) ..................................... 19
TOPIC 3: Risk Management Frameworks and Standards ................................................................................... 19
TOPIC 4: RM In The Organization: Governance, Context, Internal Audit, Compliance (3 Lines Of Defense),
Internal Control, Risk Culture, Policy ................................................................................................................... 19
TOPIC 5: Company Strategy, Objectives, Responsibilities, Structure, Program Etc. ........................................ 20
TOPIC 6: Risk Appetite, Risk Tolerance, Risk Attitude, Risk Capacity, Limits ....................................................... 20
TOPIC 7: Types and Impact of Risk On Organizations.......................................................................................... 20
TOPIC 8: Risk management process: identification, assessment, treatment, control, financing ........................ 21
TOPIC 9: Added Value, Cost and Benefits of Risk Management ......................................................................... 21
Block 02: Risk Assessment ................................................................................. 22

TOPIC 1: Risk & Uncertainty and Impact On Strategy ........................................................................................ 22
TOPIC 2: Risk Identification and Classification ................................................................................................... 23
TOPIC 3: Risk Identification Techniques ............................................................................................................. 23
TOPIC 4: Qualitative Risk Analysis Tools and Techniques ................................................................................... 24
TOPIC 5: Quantitative Risk Analysis Tools and Techniques ................................................................................. 24
TOPIC 6: Risk Consequence, Likelihood and Severity .......................................................................................... 24
TOPIC 7: Risk Modelling....................................................................................................................................... 24
TOPIC 8: Risk Register, Risk Matrix, Risk Profile, Risk Map ................................................................................. 25
Block 03: Risk Treatment I ................................................................................. 26

TOPIC 1: General Aspects (Company Risk Appetite, Inherent and Current Level of Risk; Risk Tolerance,
Treatment, Transfer and Termination, Etc.) ........................................................................................................ 26
TOPIC 2: Types of Risk Treatment/Response ..................................................................................................... 26
TOPIC 3: Risk Control Techniques: Loss Prevention, Claims Management and Opportunities ....................... 26
TOPIC 4: General /Financial Risk-Related Controls............................................................................................. 27
TOPIC 5: Business Continuity: Emergency and Crisis Management .................................................................... 27
TOPIC 6: Other Techniques ................................................................................................................................. 27
3
Block 04: Risk Treatment II ................................................................................ 28

TOPIC 1: Risk Financing Techniques ................................................................................................................... 28
TOPIC 2: Insurance Sector .................................................................................................................................. 28
TOPIC 3: Insurance ............................................................................................................................................. 29
TOPIC 4: Reinsurance ......................................................................................................................................... 29
TOPIC 5: Captive (Re) Insurance Companies ....................................................................................................... 30
TOPIC 6: Alternative Risk Transfer Methods ....................................................................................................... 30
TOPIC 7: International Insurance Market ............................................................................................................ 30
Block 05: Risk Communication, Monitoring & Review ....................................... 31

TOPIC 1: Risk Culture and the Human Factor ..................................................................................................... 31
TOPIC 2: Corporate Social Responsibility ........................................................................................................... 31
TOPIC 3: Communication, Consultation, Corporate Governance & Role of the Board ...................................... 32
TOPIC 4: Risk Management Information Systems .............................................................................................. 33
TOPIC 5: Risk Monitoring ..................................................................................................................................... 33
TOPIC 6: Risk Review ........................................................................................................................................... 34
TOPIC 7: Risk Assurance ...................................................................................................................................... 34
TOPIC 9: Risk Reporting ....................................................................................................................................... 34
Block 06: Specific Risk Management Topics ...................................................... 36

TOPIC 1: Operational Risk Management ............................................................................................................ 36
TOPIC 2: Supply Chain Risk Management........................................................................................................... 37
TOPIC 3: Incident and Claims Management ....................................................................................................... 38
TOPIC 4: Portfolio, Programs and Project Risk Management ............................................................................. 38
TOPIC 5: Mergers & Acquisitions ......................................................................................................................... 38
TOPIC 6: Business Continuity: Emergency & Crisis Management ....................................................................... 39
TOPIC 7: Emerging and Future Risks.................................................................................................................... 39
TOPIC 8: Other Topics.......................................................................................................................................... 39
4
This document sets the core knowledge syllabus for the "FERMA Certification in Risk Management". The
aim is to analyze the academic and professional conditions that candidates, organizations and individuals
must cover to get the FERMA Accreditation and FERMA Certification in Risk Management. To set this
Body of Knowledge a structure of 6 different Blocks have been designed by the members of this pillar 1
team.
For analysis of these Blocks we have created a series of tables in which the objectives of the domain, the
topics of each Block, the inputs and outputs as well as the learning outcomes will be described.
Subsequently, these Blocks and their topics and chapters will also be developed in the future in more
detail in tables as a core syllabus that will cover the most important aspects as well as the available
literature.
This work was performed by a team of 8 people as representatives from different national associations,
which has allowed to cover and collect a wide variety opinions and possibilities, making the work that is
presented be representative of the views of all.
FERMA thanks the members of this Pillar 1 for their work and effort in completing this document and the
ongoing process.
AMRAE
Franois Malan
SWERMA
Torgny Bogrde
RUSRISK
Anna Korbut
POLRISK
Sawomir Pijanowski
SI.RISK
Klemen Potisek
FERMA
AGERS
FERMA
BELRIM
Isabel Martnez TorreEnciso

Marie Gemma Dequae
Program Design: Blocks

FERMA is designing a program for Accreditation and Certification to cover the overall and comprehensive
knowledge base with which Risk Manager should be familiar in their professional career.
FERMA Certification includes the knowledge level needed to start in the world of risk management as
well as other more strategic and specific knowledge that will provide the candidate the ability to
successfully perform both in the junior and senior part of their professional career. Along with this
knowledge, for obtaining FERMA Certification, candidates must demonstrate a number of years of
experience as well as achieving the pillars of ethics and CPD at levels to be determined.
5
The program of this body of knowledge is shown in the next table:

BLOCK N 00: Business basis for Risk Manager
BLOCK N 01: Essentials of Risk Management
BLOCK N 02: Risk Assessment
BLOCK N 03: Risk Treatment
BLOCK N 04: Risk Treatment II
BLOCK N 05: Risk Communication, Monitoring & Review
BLOCK N06: Specific Risk Management Topics
Within pillar 1, each Block will have a development at different stages, from the most general to the
most specific, to what has been thought in the following names: Pillar, Block, Topic and Chapter.
An example would be:
PILLAR: KNOWLEDGE
BLOCK: BLOCK 2: RISK ASSESSMENT
TOPIC: 2. 3. RISK ASSESSMENT, VALUATION AND QUANTIFICATION

TECHNIQUES
CHAPTER: 2.3.2. Basic qualitative risk analysis tools and techniques
By the time team 1 has worked on the structure of the Blocks and the topics of each Block. The
development of the chapter analysis will be performed at a later stage.
This part of the document distributed body of knowledge in different Blocks with reference only to
highlight topics, without going into the content or specification thereof. In this section, as well as for the
further development of the core syllabus, it was decided to use ISO Terminology but with an open
structure to other frameworks and professional standards in order to include all the knowledge
necessary for professional development whether or not included in standards.
The structure of Blocks has been designed following the risk management process, starting with a Block
00 on the business basis of knowledge that a Risk Manager. A margin of freedom should be given to
National Associations to organise these general knowledge.
Block 1 on the key concepts for the risk manager and the professional practice of risk management
introduces the risk manager in the context of the organization and the concepts of risk and enables the
6
further development of the process. Then is analyzed very deeply in different Blocks (2, 3 and 4) the
process of identification, assessment, control and risk financing with very specific and detailed topics. A
fifth Block included more strategic and organizational topics of risk management. To complete the
syllabus a Block dedicated to other topics is introduced.
Block Description
Each Block listed is described in the following tables indicating its objectives, its input and output and the
topics that should be covered.
Block 00: Business Basis for Risk Manager

AIM: The aim of this Block is to allow applicants to the FERMA European certification to demonstrate their
knowledge in a comprehensive range of basic knowledge, skills and techniques important for the development of
the risk manager activities and profession.
INPUT: All knowledge that candidates will have in advance, will be a good starting point for the development of this
Block as well as for work in risk management.
OUTPUT: This Block is considered as an initiation Block that will allow FERMA CERTIFICATION applicants to align
their knowledge base and managerial skills for the further development in the other Certificate Blocks.
COVERAGE:
1. Essentials Of Business And Economics
2. Basic Statistics & Financial Mathematics
3. Basic Corporate Finance
4. Financial Statements
5. Basic Of General Management
6. Legal & Contract Management
7. Basic Marketing
8. Communication
9. Information Technology & Computer Skills
10. Change Management
COMMENTS: This Block attempts to align knowledge and skills of the candidates by reviewing and deepening the
general and fundamental aspects of business management in the broadest sense. The idea is to train candidates
with essential management tools for professional development that bring these professionals at the highest level
of the organization. At the same time individuals should acquire strong computer skills.
7
Block 01: Essentials of Risk Management

AIM: This Block provides general knowledge for applicants involved in risk management, designing the broader
frame of RM within the organization.
The objective is to understand the importance of principles, framework and the context for achieving an efficient
and coherent risk management process that creates and protects values.
INPUT: Standards such as ISO 31000, COSO ERM, FERMA, ANZ, Cadbury, etc.
OUTPUT: get knowledge of the framework, standards, context and environment of risk management, as
fundament to build following Blocks on.
COVERAGE:
1. Introduction To FERMA Risk Manager Certification (4 Pillars System)
2. Principles And Aims Of Enterprise-Wide Risk Management (Includes Ethics)
3. Risk Management Frameworks And Standards
4. RM In The Organization: Governance, Context, Internal Audit, Compliance (3 Lines Of Defense),
Internal Control, Risk Culture, Policy
5. Company Strategy, Objectives, Responsibilities, Structure, Program Etc.
6. Risk Appetite, Risk Tolerance, Risk Attitude, Risk Capacity, Limits
7. Types And Impact Of Risk On Organizations
8. Risk Management Process: Identification, Assessment, Treatment, Control, Financing
9. Added Value, Cost And Benefits Of Risk Management
COMMENTS: The Block can be completed with national regulation or standards and local specificities.
8
Block 02: Risk Assessment

AIM: This Block revises the full process of identification, assessment and evaluation of risk in an organization. This
Block also covers analysis tools and techniques.
INPUT: RM Frameworks, Statistical Methods and Modelling, Quantitative Assessment and Forecasting Methods,
Probability Analysis, Financial Analysis, Security Analysisetc
OUTPUT: Ability to comprehensively identify and assess risk of all types while employing theoretical valuation and
forecasting methods.
COVERAGE:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Risk & Uncertainty And Impact On Strategy

Risk Identification And Classification
Risk Evaluation Techniques
Qualitative Risk Analysis Tools And Techniques
Quantitative Risk Analysis Tools And Techniques
Risk Consequence, Likelihood And Severity
Risk Modelling
Risk Register, Risk Matrix, Risk Profile
Others
COMMENTS: the main outcome of this Block will be the capability to identify, compile, analyze, evaluate and
measure the exposures to probable risks, accidental risks, extraordinary risks and business losses facing by
individuals and organizations. Understanding and assessing all general and specific types of risk should be covered
including: emerging risks and cyber, social media, climate change, reputation, regulatory, supply chain, financial,
legal, property, personnel, environmental, fraud, etc.
9
Block 03: Risk Treatment I

AIM: This Block provides mechanisms and tools necessary for the treatment of risks and losses, with special
emphasis on control / reduction measures. The purpose is to understand the nature, purpose, and steps involved in
risk control.
INPUT: Economic and regulatory capital concepts, environmental and social awareness, regulatory aspects, capital
adequacy, economics and capability of risk assumption and transfer, operations management, HRM, limit setting,
compliance principles, principles of crisis management, managerial accounting concepts, quality control, general
approaches to BCP (business continuity planning), basic knowledge on technical equipment and tools to prevent
fire, flood, natural hazardsetc.
OUTPUT: Decision making framework on risk assumption, treatment and/or transfer, response action planning
related to IT risks, BI (business interruption), crisis, regulatory authorities interaction management.
COVERAGE:
1. General Aspects (Company Risk Appetite, Inherent And Current Level Of Risk; Risk Tolerance,
Treatment, Transfer And Termination, Etc.)
2. Types Of Risk Treatment/Response
3. Risk Control Techniques: Loss Prevention, Claims Management and opportunities
4. General /Financial Risk-Related Controls
5. Business Continuity Management: Emergency and Crisis Management
6. Other Techniques
COMMENTS: Applicants must utilize the analysis to develop loss prevention & protection strategies and to engage
business units. They should manage different type and extent of loss prevention & protection efforts and monitor
activity and results. FERMA Certification candidates must understand a wide range of risk control techniques, as
prevention, protection or reduction.
10
Block 04: Risk Treatment II

AIM: The important part of risk treatment process is risk sharing, risk financing process which purpose is to
understand the nature, purpose, and steps involved in risk financing (retention and transfer). This Block develops
an understanding of basic financing techniques, the insurance principles and the primary benefits insurance
contributes to society.
INPUT: Actuarial science; insurance economics; procurement principles; legal, economic and operations
perspective of captive insurance companies, reinsurance market, ; principles of financial instruments; investment
banking sector; use of fundamental and technical analysis in decision making process; stress testing, scenario
analysis, valuation and bookkeeping of insurance instruments.
OUTPUT: Economics based decision making framework in risk transfer; best practice in concluding risk transfer
arrangements and claims management (including internal rules and procedures set-up); knowledge on when and
how to get an insurance and also when and how to get out.
COVERAGE:
1.
2.
3.
4.
5.
6.
7.
Risk Financing Techniques

Insurance Sector And Solutions
Insurance
Reinsurance
Captive (Re-)Insurance Companies
Alternative Risk Transfer Methods, Products/Hedging Instruments
International Insurance Market
COMMENTS: FERMA Certificate applicants should understand techniques for financing retention, transfer,
insurance or the alternative risk transfer instruments. They should understand the criteria for making risk financing
decisions as well as the development of risk financing strategies and the selection, implementation and monitoring
of risk financing techniques and should know legal concepts and the legal environment in which insurance
operates. They will know the concepts of risk and its relationship to insurance as well as the role of risk
management with the company insurance policy. They will be able to develop alternative financing techniques as
insurance, self-insurance, retrospective rating, reinsurance, or captive insurance.
11
Block 05: Risk Communication, Monitoring & Review

AIM: This Block allows candidates to get the necessary skills in risk communication and consultation with
stakeholders and understanding of the importance of a sound risk culture in order to get reliable risk management
that encompasses all aspects of an organizations risk. This Block also covers the components of monitoring and
review such as coverage, risk reporting design, frequency, recipients, etc. as critical parts of the risk management
process.
INPUT: Basic knowledge on company culture, relations with stakeholders, risk information, value added decision
making process
OUTPUT: To know how to produce a risk report and action plan to the board of a company.
COVERAGE:
1.
2.
3.
4.
5.
6.
7.
8.
Risk Culture and the Human Factor

Corporate Social Responsibility
Communication, Consultation, Corporate Governance & Role Of The Board
Risk Management Information Systems (RMIS)
Risk Monitoring
Risk Review
Risk Assurance
Risk Reporting
COMMENTS: Within the company assurance environment and policy, candidates should know how to get a
specific level of satisfaction with respect to the reliability of the risk and risk management information and
documentation provided.
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Block 06: Specific Risk Management Topics

AIM: The goal of this Block is to explore important specific business areas related to risk and risk management,
such as Business Continuity, incident and claims management or crisis management, and the link to strategic
management.
INPUT: Basic technical knowledge about IT (hardware / software, Cyber risks), merger and acquisition process (due
diligence and integration aspects), loss of profit evaluation (gross earning / gross profit), analysis of financial
statements.
OUTPUT: To be knowledgeable about theories, best practices and trends in the different topics covered in this
Block.
COVERAGE:
1.
2.
3.
4.
5.
6.
7.
8.
Operational Risk Management

Supply Chain Risk Management
Incident And Claims Management
Portfolio, Programs And Project Risk Management
Mergers & Acquisitions
Business Continuity: Emergency and Crisis Management
Emerging And Future Risks
Other Topics (projects risk management, credit risk management, )
COMMENTS: Candidates should know concrete tools for the management of specific risks such as the operational,
supply chain, incident and claims as well as the relations of risk management with the related areas of business
continuity and crisis management. As all organizations want to grow it is important to have knowledge of M&A and
work in projects risk management.
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Learning Outcomes
Block 00: Business Basis for Risk Manager

TOPIC 1: Essentials of Economics and International Business
CHAPTER
LEARNING OUTCOME
Macroeconomics
Measuring national income and price

Equilibrium in the real market: Consumption, Investment
Equilibrium in the money market
Equilibrium in economy and aggregate demand
Inflation, Economic growth, Business cycles
Macro Dynamics
International Economy And Foreign Exchange
Market
Open Macroeconomics, Foreign Exchange Rate
Principles Of Managerial Economics
Insights into how market economies function: what determines the price of
a good and the quantities produced and consumed, how government
policies and other external events affect prices and quantities, in which
cases market outcomes are efficient and in which cases they are not; main
market types (perfect competition, monopoly, monopolistic competition
and oligopoly)
TOPIC 2: Basic Statistics & Financial Mathematics

CHAPTER
LEARNING OUTCOME
Basics In Statistics
Variables, population, samples, measurement of central tendency
Probability Distributions And Descriptive

Statistics
Regression and correlation, probability, variance and standard deviation,

distributions
Hypothesis Testing
Estimations, hypothesis testing, hypothesis test
Time Value Of Money
Simple and Compound Interest, Effective Interest Rates, Future value,

Present value, Annuities, Amortization
TOPIC 3: Basic Corporate Finance

CHAPTER
LEARNING OUTCOME
Fundamentals Of Corporate Finance
Goals of Corporate Finance, Finance Function and the Firms Objectives,

Corporate Governance
What is value? The valuation process, Value creation for shareholders What
is cash flow? Basics of cash flow analysis; Terminal values
Principles Of Valuation And Discounted Cash

Flow
14
Capital Investment Decisions, Cost Of Capital And Investment Decisions: Payback rules, Discounting payback period method,
CAPM
IRR (internal rate of return), NPV (net present value)
Cost of capital: Cost of equity capital, Cost of debt capital, WACC (weighted
average cost of capital)
CAPM (Capital Asset Pricing Model): Measuring beta, Risk free rate, Risk
adjusted discount rates
Long-Term Financial Policy
Investments decision
Project evaluation: Method for ranking investment proposals, Capital
resource rationing, Common pitfalls (e.g. Sunk costs,
depreciation)
Short-Term Financial Policy
Short-term financing: Working capital, Short term financing
Cash management and Credit management
Capital Structure And Dividend Policy
Leverage and the value of the firm
Dividend policy
Equity And Bond Valuation
Valuation Model of Common Stock, Bond Yield Measures, Term Structure
of Interest Rates, Bond Price Analysis, Risk Measurement, the issue process
TOPIC 4: Financial Statements

CHAPTER
LEARNING OUTCOME
Financial Accounting, Financial Reporting And

Statement Analysis
Basic financial accounting, Financial statements: Balance sheet, Income

statement, Statement of cash flows, Statement of changes in equity
Financial reporting: Uses of financial statements, International differences
in accounting
Objective of financial Statements, Fundamental definitions (asset,
liability, equity, revenue, expense), The cash flow statement , Criteria for
revenues recognition, Measurement of revenues
Assets: Property, plant and equipment, Investment property, Intangible
assets, Inventories, Financial instruments
Liabilities: Bonds, Hybrid securities, Leases, Retirement benefits, Provisions
Shareholders Equities
Framework For The Preparation And

Presentation Of Financial Statements
Assets, Liabilities And Shareholders Equity
Profitability And Risk Analysis
Profitability analysis: ROA (return on assets), ROCE (return on capital

employed)
Risk Analysis: Short term liquidity risk, Long term solvency risk
TOPIC 5: Basic of General Management

CHAPTER
LEARNING OUTCOME
Management Policy And Process
Management of business processes in order to optimise corporate

performance: BPM (business process management) total quality
management, continuous improvement process
Introduction To Business Information Systems
ICT strategy, IT architecture and the design and use of ICT systems. Given
the growth and importance of large business information systems that are
able to register and process immense data sets, the use of ERP systems and
Business Intelligence is also important.
15
Principles Of Organizational Behaviour
Organizational behaviour involves the study of how, why and what people
think, feel, and do in organizations (individual & group behaviour)
Leadership, Values, And Corporate Responsibility
Self-management & develop management skills, understand leadership vs.

management, setting expectations & accountabilities, managing conflict
and change, cultural differences,
Principles Of Human Research Management
A broad and sound basic knowledge about HRM, which allows students to
perform better as subordinates or supervisors in their future organizations.
TOPIC 6: Legal & Contract Management

CHAPTER
LEARNING OUTCOME
Principles Of Law
Introduction to legal science, basic structures of legal systems, legal

terminology, and legal reasoning
Society And Enterprise & Corporate Social

Responsibility
Understand issues and relationships related with risk
Introduction To International And European Law
Capture and follow the evolution of the legal environment where you do
business
Compliance
Learn to know how to build a management process which identify the

applicable requirements (as defined in laws, regulations, contracts,
strategies and policies) in order to assess the state of compliance
Ethics
Learn to know about the principles of conduct governing an individual or a

group based on moral duty and obligation based on what is good and bad
TOPIC 7: Basic Marketing

CHAPTER
LEARNING OUTCOME
Understanding the Role of Marketing
Define what marketing is and how it fits into the organization, marketing
system exchange map, marketing-oriented companies, models of consumer
decision making
Marketing Strategies
Strategic approaches to the planning process, mass marketing versus

segmentation marketing, segments and the targeting process,
differentiated positioning strategy, Components of the Marketing Mix
TOPIC 8: Communication
CHAPTER
LEARNING OUTCOME
Communication Skills For Managers
Communicate to influence and inspire, team building, virtual team

communication
Communication Tools For Managers
Description of different systems and tools: visio conf, intranet, internal
16
medias, information letters
TOPIC 9: Information Technology

CHAPTER
LEARNING OUTCOME
OS (Operating Systems)
Windows operating system to develop foundational skills in the areas of file

management, word processing, spreadsheets, presentation software, and
emerging technologies. Projects emphasize problem solving, data analysis,
and the use of Internet communication tools.
ICT infrastructure
Insight into the structure and characteristics of computer infrastructure,

such as servers and clients, storage and networking equipment. This is
necessary to be able to develop a general architecture of ICT infrastructure.
TOPIC 10: Change Management

CHAPTER
LEARNING OUTCOME
Psychology of Change
Foundational principles for managing change, best practices in change

management, Fundamentals of managing the people side of change
Change Management Process
Process for Managing Change, Organizational Change Competency,

Connecting Change Management to Business Projects, Change
Management Strategy, Change Management Team
Managing Change
Communication Plan, Sponsor Roadmap, Coaching Plan, Resistance

Management Plan, Training Plan, Master Change Plan
BIBLIOGRAFY, READING, LEARNING MATERIALS

TOPIC 1: Essentials of Economics and International Business
th
BLANCHARD O. (2011), Macroeconomics, Prentice Hall, 5 edition

JAMES COLLINS, Good to Great
TOPIC 2: Basic Statistics & Financial Mathematics
Essentials of Statistics downloadable from www.bookboon.com
Statistics for Business and Economics downloadable from www.bookboon.com
Essentials of Statistics: exercises downloadable from www.bookboon.com
TOPIC 3: Basic Corporate Finance
th
BREALEY AND MYERS AND ALLEN (2013), Principle of Corporate Finance, McGraw-Hill, International, 11 edition
th
BODIE, KANE AND MARCUS (2013), Investment, Irwin, 1996, 10 edition
17
The capital asset pricing model (CAPM) downloadable from www.bookboon.com

TOPIC 4: Financial statements:
th
PENMAN Stephen, (2012), Financial statement analysis and security valuation, McGraw-Hill, International edition, 5 edition
TOPIC 5: Basic of General Management:
Management basics: downloadable from www.bookboon.com
TOPIC 6: Legal & Contract management
Contract lifecycle management downloadable from www.bookboon.com
TOPIC 7: Basic Marketing
Essentials of Marketing downloadable from www.bookboon.com
TOPIC 8: Communication
Effective communication skills downloadable from www.bookboon.com
Advanced communication skills downloadable from www.bookboon.com
TOPIC 9: Information Technology
IT strategy and technology downloadable from www.bookboon.com
TOPIC 10: Change Management
CAMERON, E. & GREEN, M. (2012), Making Sense of Change Management, Kogan Page Ltd, 3rd edition.
Change management downloadable from www.bookboon.com
Block 01: Essentials of Risk Management (COMPULSORY)

TOPIC 1: Introduction to FERMA Risk Manager Certification (4 Pillars System)
CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Risk Management Associations
Description, history, how it works, relations on national and

international levels
FERMA
To know the national association of the country in which

the Passport is granted (for certification : the country where
18
the RM is located)
Fundamental of FERMA organization and objectives
The 4 Pillars Of Certification
Knowing the 4 pillars (Knowledge, Experience, CPD & Ethics)
The 2 Levels Of Certification
To know the difference and the way of obtaining (and

keeping) the passport or the advanced level
TOPIC 2: Principles and Aims of Enterprise-Wide Risk Management (Includes Ethics)

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Principles of ERM
Principles could be divided into what should be the

characteristics of RM and what it should deliver
Aim of ERM
To understand the different aims of each organization:

compliance, assurance, decision making, efficiency of
operations, effectiveness pf processes or efficacy of
strategy
TOPIC 3: Risk Management Frameworks and Standards

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
COSO Erm
From COSO 1 to COSO 2 (origin, objectives, , contents)
ISO 31000
Description of ISO 31000
Local Framework
Framework of the country in which the Passport is granted

(for certification : the country where the RM is located)
Other International Standards
FERMA framework, IRM standards, ISO 31010/31004/ COSO

III
Corporate Internal Standards
Some companies use their own standards (linked to the

culture and the maturity of the company)
TOPIC 4: RM in the Organization: Governance, Context, Internal Audit, Compliance (3 Lines Of Defense),
Internal Control, Risk Culture, Policy
CHAPTER
Historical Background
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Origin of RM in the US, Europe, in the country in which the

Passport is granted (for certification : the country where the
19
RM is located)
RM In The Company
Position, most common attachment
3 Lines Of Defense Definition
1 (operational management)t , 2
rd
3 (internal and external audit)
st
nd
(RM, internal control)
3 Lines Operations
Relations With Other Departments
Relations with
Departments
Legal,
Quality,
Safety,
Environment
Risk Aware Culture
Implementation of a risk culture within the organization
X
Human and culture factors
TOPIC 5: Company Strategy, Objectives, Responsibilities, Structure, Program Etc.

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
RM Responsibilities
Board mandate and commitment, scope of the initiative,

RM responsibilities within the organization
Company Framework For Managing Risk
Description of risk architecture, risk strategy, risk protocols

& RM policy
Implementation Of The Framework
Tools to implement framework and RM processes
Monitor, Review & Improve The Framework
Tools to monitor the framework
TOPIC 6: Risk Appetite, Risk Tolerance, Risk Attitude, Risk Capacity, Limits
CHAPTER
Risk Strategy Definition
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Risk appetite, risk tolerance, risk attitude, risk capacity,

limits, CEO involvement
HOW? Tools spreadsheets which can be used
Risk Strategy Applicability
Risk appetite, risk tolerance, risk attitude, risk capacity,

limits, CEO involvement
WHY?
TOPIC 7: Types and Impact of Risk On Organizations

CHAPTER
LEARNING OUTCOME
Passport Advanced
20
Definition Of Risk
Level (X)
Level (X)
Various definitions : a threat or an opportunity the origin

or the consequence
Need to be stated by each Company and communicated
Types Of Risks
Internal or external risks, strategic or operational risks, HR,

legal
Impact Of Risks
Financial or non-financial impact (image)
Recording Risk Assessments
Risk register, spreadsheet, computer-based system
TOPIC 8: Risk management process: identification, assessment, treatment, control, financing

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Risk Management Process
Different types of process ex: ISO 3100 (7Rs & 4Ts), FERMA,
local standards
Identification & Assessment (Definition)
Essential of risk assessment (methodology, Top-down,

bottom-up approach, risk matrix)
Reduction & Control (Definition)
Essential of risk control (or mitigation), risk avoidance or

reduction (including loss prevention), risk transfer
(contractual) and opportunities
Risk Financing (Definition)
Essential of risk financing : retention, insurance, captives,

ART
Feedback Mechanisms
Essential of monitoring and review of performance,

communication and consultation
TOPIC 9: Added Value, Cost and Benefits of Risk Management

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Cost of risk
Total Cost of Risk (TCOR): calculation, use
Added value and benefits of Risk Management
Calculation of the optimal risk/return profile
21
Airmic Alarm 2010, Understanding and Communicating Risk Appetite, IRM Risk Appetite, IRM Extended
Enterprise: Managing risk in complex 21st century organisations, Executive Summary COSO Board Position 09,
Framework of Board Oversight of Enterprise Risks by CA.
COSO: Internal Control - Integrated Framework: Executive Summary, Framework and Appendices, and
Illustrative Tools for Assessing Effectiveness of a System of Internal Control
IRM white paper on Risk Culture
ICGN Corporate Risk Oversight Guidelines
ERM shaping the Risk Revolution by Mckinsey and RMA
HOPKIN PAUL (2010), Fundamentals of Risk Management
Protiviti ERM guidance,
FREDERICK FUNSTON STEPHEN WAGNER (2010), Surviving and Thriving in Uncertainty: Creating the Risk
Intelligent Enterprise, Wiley
Enterprise risk management, downloadable from www.bookboon.com
Corporate governance and risk management, downloadable from www.bookboon.com
Results of various surveys such as World Economic Forum (annual Global Risks report).
Presentations of best practices case studies. Laws and regulations such as KONTRAG, Sarbanes Oxley, Dodd
th
Frank Act, GL 44, and EU: 8 company law directive, Solvency II, Basel III, etc.
Block 02: Risk Assessment

TOPIC 1: Risk & Uncertainty and Impact On Strategy
CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Risk and Risk Management Definitions
Uncertainty And likelihood
Understanding risks and acquiring fundamentals of risk

identification; acquiring ability to gather the necessary
internal/external data and information for risk modelling and their
validation
Acquiring basis for risk quantification (likelihood => risks;

uncertainty => black swans?) and ways to handle such issues
22
Risk Influenced Strategy
Principles of risk based strategy setting and adjustment

X
Integration of strategic management and risk management
Risk Policy
Risk Tactics
Being able to formulate risk policy taking into account companys

strategic goals, risk attitude & appetite, its industry, market; RM
should understand why and how the policy should be reviewed and
adjusted to serve its purpose
Being able to decide on proper and timely tactical adjustments to

adopted risk strategy within changed circumstances, and
communicate the necessary changes incl. exit strategy) in
comparison with the base scenario (quantitatively and qualitatively)
TOPIC 2: Risk Identification and Classification

CHAPTER
Passport Advanced
LEARNING OUTCOME
Level (X) Level (X)

Risk Classification(S)
Description Of Main Risks
Identification Of Main Risks
Becoming aware of underlying reasons for various risk classification

approaches (origin, impact, subject, industry, etc.); proper risk
identification and classification within organisation
Acquiring overview of the nature and impact of financial, quality,

liability, asset, environmental, personnel, transport, IT, intellectual
property, criminal, etc. risks
Competence to identify risks which may significantly impact or

impair an organisations ability to perform and/or survive (going
concern).
Correlated And Consequential Risks
Acquiring basis for comprehensive assessment of net risks
Classification Of Loss Exposure
Understanding the nature of losses; basis of management attention

prioritization and adequate approach to risk treatment (avoidance,
reduction, retention, transfer)
TOPIC 3: Risk Identification Techniques

CHAPTER
Passport Advanced
LEARNING OUTCOME
Level (X) Level (X)

Methods Of Identifying Risks And Loss
Exposure (Introduction)
Brainstorming, checklists,
statements, etc.
surveys,
loss
histories,
financial
Methods Of Identifying Risks And Loss

Exposure (Advanced)
(Strategic) objectives based, Scenario analysis, via identification of

risk sources (taxonomy based), FMEA (failure mode and effect
analysis), incident analysis,
23
Other Methods
ISO 31010, COSO ERM, etc.
TOPIC 4: Qualitative Risk Analysis Tools and Techniques

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Qualitative Methods
Brainstorming, checklists, surveys, external data & information, etc.
Qualitative Risk Analysis Tools And

Techniques
Probability impact matrices, risk scoring, etc.
X
X
TOPIC 5: Quantitative Risk Analysis Tools and Techniques

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Qualitative Methods
Probability theory, etc.
Statistical Methods
Ability to calculate volatility, the Greeks, correlation; regression,

trends, understanding actuarial methods etc.
Quantitative Risk Analysis Tools And

Techniques
Monte Carlo simulation, decision trees, factor analysis, sensitivity

analysis, etc.
TOPIC 6: Risk Consequence, Likelihood and Severity

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Qualitative Approach
Quantitative Approach
Identifying the hazards and associated risks, option analysis,

checklists, audits, use of sources (hazard studies), fault trees, cause
& consequence diagrams, etc.
Choice of adequate historical data, use of statistical methods,

forecasting, scenario analysis, etc.
TOPIC 7: Risk Modelling

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Risk Modelling In General
Ability to identify risk exposure and risk factors, implement and

validate risk models, identify model limitations, interpret statistical
analyses, conduct stress tests and scenario analyses
24
Asset Pricing (CAPM)
Understanding the relationship between risk, return and value of

assets
Economic Capital
Understanding the relationship between various possible risks

impact and capital needed along with risk pricing
Key Risks Indicators
TOPIC 8: Risk Register, Risk Matrix, Risk Profile, Risk Map

CHAPTER
Passport Advanced
LEARNING OUTCOME
Level (X) Level (X)

Risk Register
Competence to organize a companys risk register given its

industry, size/complexity, etc.
Risk Matrix
Competence to define risk matrix and adequate risk response given

a companys industry, size/complexity, etc.
Risk Profile
Understanding the approach to defining a companys risk profile;

competence to differ between perceived and actual risk profile and
the use of the concept to achieve target risk profile
Risk Map

ANDERSON, DAVID RAY (2012), Quantitative Methods for Business, West Publishing Company, 12
4, 5, 6, 7)
th
edition (topic
th
BODIE, ZVI (2010), Investments, Times Mirror Higher Education Group, 9 edition (topic 4, 5, 6, 7)
th
BRIGHAM, EUGENE F. (2011), Fundamentals of Financial Management, The Dryden Press, 7 edition (topic 1, 2, 3,
5)
th
BRIGHAM, EUGENE F. (2012), Intermediate Financial Management, The Dryden Press, 11 edition (topic 1, 2,3, 5)
nd
CROUHY, MICHEL (2001), Risk Management, McGraw-Hill, 2 edition (topic 1, 7, 8)

st
GREGORY, JON (2010), Counterparty Credit Risk, John Wiley & Sons Ltd., 1 edition (topic 4, 5, 6, 7)
st
SERVIGNY, ARNAUD DE (2004), Measuring and Managing Credit Risk, McGraw-Hill, 1 edition (topic 4, 5, 6, 7)
rd
WHITE, GERALD I. (2002), The Analysis and Use of Financial Statements, John Wiley & Sons, Inc., 3 edition (topic
2)
MCKINSEY WORKING PAPERS ON RISK, NUMBER 13 (2011), Risk modelling in a new paradigm: developing new
insight and foresight on structural risk
25
KING, JACK L., Operational Risk : Measurement & Modelling, Wiley Finance pp.261
MARSHALL, CHRISTOPHER, Measuring & Managing Operational Risks In Financial Institutions, Wiley Finance, pp.
569
Block 03: Risk Treatment I

TOPIC 1: General Aspects (Company Risk Appetite, Inherent and Current Level of Risk; Risk Tolerance,
Treatment, Transfer and Termination, Etc.)
CHAPTER
Company Risk Appetite
Economics Of Risk Treatment
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Competence to define risk appetite, management risk

tolerance, the role of risk manager/Chief Risk Officer/risk
committee, economic capital, regulatory capital etc.;
Knowledge and competence to provide top management
with basis for decision making on risk treatment based on
economics of risk management (scenario analysis based on
impact, probabilities and expected (opportunity) cost of
avoidance, reduction, retention or transfer)
TOPIC 2: Types of Risk Treatment/Response

CHAPTER
Risk Response
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Tolerate, treat, transfer or terminate
TOPIC 3: Risk Control Techniques: Loss Prevention, Claims Management and opportunities
CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Risk Avoidance
Understanding techniques of risk avoidance and evaluation

of eventual opportunity cost/profit
Risk Mitigation/Preventive Techniques
Understanding purpose and contents of policies,

programmes to address hazards, importance and approach
to structuring the responsibilities
26
Loss Reduction Techniques
Separation, Diversification And Duplication

Techniques
Knowledge of operations management and competence to

assess opportunity in lateral approach control of
infrastructure risks (health & safety at work, natural
hazards, property fire protection, IT security, HR risks),
control of reputational risks brand protection,
environment), control of marketplace risks (technology
developments, regulatory risks)
Understanding the tools and risk situations in which they

can be successfully applied
TOPIC 4: General /Financial Risk-Related Controls

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Limit Setting
VaR, credit limits, Altman Z Score (and other models),

concentration indices, etc.
Control Set-Up
Control framework, techniques, necessity of predefined

criteria, monitoring frequency, etc.
Others
Fraud control
X
Historical liabilities (exposure to asbestos, related to

pension funds,
TOPIC 5: Business Continuity Management: emergency and crisis management

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X)
Level (X)
Business Continuity (definition)
Understanding emergency and crisis management concepts
Disaster Recovery (definition)
Policies, pre-disaster protection and mitigation measures,

continuity of operations planning, post-disaster response
and recovery elements of continuity planning, etc.
Business Impact Analyses, Recovery Strategies

And Business Continuity Plans
Competence to outline BC/DR plan
Testing, Training And Awareness Programmes
Competence to outline the main contents of defined

programmes given a companys size, industry etc.
Communication and Crisis Management

Programmes
Competence to outline the main contents of defined

programmes given a companys size, industry etc.
TOPIC 6: Other Techniques
27
CHAPTER
Passport Advanced
LEARNING OUTCOME
Level (X)
National Associations Tools
Level (X)
Other techniques

th
BRIGHAM, EUGENE F. (2011), Fundamentals of Financial Management, The Dryden Press, 7 edition (topic 3)
th
BRIGHAM, EUGENE F. (2012), Intermediate Financial Management, The Dryden Press, 11 edition (topic 3)
nd
CROUHY, MICHEL (2001), Risk Management, McGraw-Hill, 2 edition (topic 1, 5, 6)

st
GREGORY, JON (2010), Counterparty Credit Risk, John Wiley & Sons Ltd., 1 edition (topic 4)
st
SERVIGNY, ARNAUD DE (2004), Measuring and Managing Credit Risk, McGraw-Hill, 1 edition (topic 4)
rd
WHITE, GERALD I. (2002), The Analysis and Use of Financial Statements, John Wiley & Sons, Inc., 3 edition
(topic 4)
th
HEIZER, JAY (2013), Operations Management, Pearson, 11 edition (topic 3)

COSO ERM, COSO Thought paper on Risk Appetite, IRM Risk Appetite &Tolerance Guidance Paper
HOPKIN PAUL (2010), Fundamentals of Risk Management p.420
Pollution prevention & Control downloadable from www.bookboon.com
Block 04: Risk Treatment II

TOPIC 1: Risk Financing Techniques
CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Understanding risk absorption provisions, economic &

regulatory capital, captive insurance concepts & their
economics
Risk Transfer
Understanding the use of financial derivatives & markets,

(re)insurance covers, natural hedge
Other Risk Financing Techniques
Securitisation
Risk Retention
TOPIC 2: Insurance Sector

28
CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Insurance Market
Understanding the mechanics and organisation of insurance

sector; understanding insurance sector risk transfer products
X
Knowing the main actors (brokers, insurers, insurance industry

network)
Insurance Programs
Local vs. international insurance programs & regulatory

perspective/influence, master insurance policies vs. local
policies, choice of right insurance mix - optimal (international)
coverage, claims management, etc.
International Insurance Legislations and

Regulations
Particularities in insurance policies, coverage & claims

management under general legislative approaches (e.g. AngloSaxon vs. Continental Law); particularities in liability insurance,
etc.. compliance in international insurance programs
National Legislations and Regulations
Knowledge of national insurance sector, market/solutions and

particularities, etc.
TOPIC 3: Insurance
CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Types Of Insurance Cover

Premium
Deductibles
Material Contractual Obligations
Broad knowledge of types of insurance: property, liability,

marine
Knowing how the premium is calculated, revised, taxed
Rationale for deductibles for insurer and the insured

(economics & scenario analysis of deductibles based on
mathematical probability (market/company) including analysis
of historical data/time series of cases.
Knowledge of key legal principles and obligations with which

the insured should be familiar
TOPIC 4: Reinsurance
CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Reinsurance Definition
Reinsurance Market
Understanding the structure and operations of reinsurance
29
market, parties involved, functioning of captive (re)insurance

companies
Classifications
Proportional and non-proportional (per-risk, per-event & stoploss cover).
New Reinsurance Techniques
TOPIC 5: Captive (Re) Insurance Companies

CHAPTER
Passport Advanced
LEARNING OUTCOME
Level (X) Level (X)

Captive Definition
Knowledge of captive insurance principles and possibilities

(single parent, association, industry captive, rent-a-captive, cell
captives, etc.)
Organisations & applications
Knowledge of legal/regulatory and tax aspects of captives.
Captives as risk retention and risk transfer

tool
Understanding rationale, economics and mechanics of captive

insurance companies
Classification
TOPIC 6: Alternative Risk Transfer

CHAPTER
Passport Advanced
LEARNING OUTCOME
Level (X) Level (X)

Standard Methods
Alternative Risk Transfer (ART) Methods
Understanding the mechanics and organisation of financial

sector; understanding financial sector risk transfer products,
options, bonds
Catastrophe bonds, reinsurance sidecars, industry
warranties; financial derivatives, etc.
loss
TOPIC 7: International Insurance Market

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Structure And Organization Of

International Insurance Market
Parties involved importance, governance, regulation, etc
International Programs
Products, insurance policies, claims management, etc.
X
X
30

BAWCUTT, PAUL (1997), Captive Insurance Companies: Establishment, Operation and Management,
th
Witherby & Co Ltd, 4 edition (topic 4, 5)
BRIGHAM, EUGENE F. (2011), Fundamentals of Financial Management, The Dryden Press, 7th edition (topic
6)
BRIGHAM, EUGENE F. (2012), Intermediate Financial Management, The Dryden Press, 11th edition (topic 6)
CARTER, ROBERT.L (1991), Principles Of Reinsurance, Practice Of Reinsurance, The Reinsurance Market, The
Chartered Insurance Institute Tuition Service
Block 05: Risk Communication, Monitoring & Review

TOPIC 1: Risk Culture and the Human Factor
CHAPTER
LEARNING OUTCOME
Risk Communication & Review
Definitions
Risk Culture Definition
Know and understand the importance of risk culture for an

effective risk management and the soft factors are even
more important than the hard ones.
Understand that walk the talk is critical for a legitimate and
trustful risk culture.
Passport
Advanced
Level (X)
Level (X)
That risk culture is the effect of long-term work; slowly built

up but quickly destroyed.
Risk Culture Criteria
Able to define criteria of risk culture.
To know that soft factors like risk culture can be audited

and verified.
Give examples of synonyms to risk culture = control

environment and corporate culture
TOPIC 2: Corporate Social Responsibility

CHAPTER
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
31
CSR (corporate social responsibility)

Definition
Corporate self-regulation within the business model,

embracing responsibility for corporate actions to all
stakeholders
COSO Demystifying sustainability risks.
Know and understand the connection and context of

internal and external risks, the growing weight stakeholders
put on sustainability risks.
3 lines of defence, CSR vs corporate governance
Standards
TOPIC 3: Communication, Consultation, Corporate Governance & Role of the Board

CHAPTER
LEARNING OUTCOME
Passport Advanced
Level (X) Level (X)
Definitions
Communication
Communication and consultation with external and internal

stakeholders should take place during all stages of the risk
management process.
It is important to develop (educate) Board members. To give to
this the key significance - continuous learning for RM
stakeholders and key users, sound increase in RM
professionalism within the Board. Board is the key client and
they are strongly expected to be an Educated Client - ready and
able for dialogue about RM system development, not just
"passive" report consumers.
Communication for business lines and company employees:

tools, eLearning
Board shall be able and ready to have dialogue with the risk
managers to define, develop and practically pose tasks,
requirements and challenge for RM function; select format and
size of the system; select tools and instruments relevant for
particular company, etc.
Learn which responsibilities Board directors have and which
questions directors should ask re risk oversight, objectives of
ERM, effectiveness of Managements RM process (with
adequate resources) capacity and appetite for risk, portfolio
and consolidation of risks, reporting (adequacy and timeliness)
Plans For Communications
Therefore, plans for communication and consultation should be

developed at an early stage.
Stakeholders Definition
Who are the stakeholders?
Consultation
32
Relations With Stakeholders
Communication and consultation with stakeholders is important

as they make judgements about risk based on their perceptions
of risk. Communication and consultation should facilitate
truthful, relevant, accurate and understandable exchanges
of information, taking into account confidential and personal
integrity aspects.
Cognitive biases various studies very definitively suggest that
cognitive biases play a significant role in human ability to
correctly identify, assess and mitigate risks. Within risk
managers activities needs to be big deal of adequate coverage
of significant cognitive biases and steps to overcoming them.
Communications With Stakeholders
Know how to differentiate risk communication for different

stakeholders, types of risks, Understand the differences of risk
perception and the importance of timing of risk
communication.
Conditions
Risk Managers role is to facilitate, advice, co-ordinate the

RM-process.
Lines of responsibilities/defence. Separation of duties.
Dualities. All necessary for effective Governance and
Controls.
To understand that the Board has the ultimate responsibility

of Risk Oversight but that all risk owners are responsible for
their risk management.
TOPIC 4: Risk Management Information Systems

CHAPTER
Risk Management Information Systems
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
Know the important Risk Management information Systems

on the market and their main features. If needed build your
own RMIS
Forrester and Gartner surveys.
TOPIC 5: Risk Monitoring

CHAPTER
Risk Monitoring
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
The risk monitoring can be applied in sequence:

-
Basic qualitative risk analysis techniques

(likelihood x consequences) is applicable by all
organizations
Intermediate tools like bow-tie analysis and other
33
semi-quantitative techniques should be applied to

high risks assessed.
-
Advanced steps like risk modelling and quantitative

techniques should be applied to only significant
risks.
KPI/ limit indicators

Internal Control Self-Assessment (ICSA)
Self-control and Self-assessment shall be recognized as

ones but exhaustive risk identification techniques.
TOPIC 6: Risk Review

CHAPTER
Efficiency (general)
Efficiency For Board Members
Risk Indicators
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
Top priority starting points - Strategic planning, business

planning, budgeting. Risk assessments must be
incorporated into strategy setting and business planning.
Budgets should be agreed and signed off only after a risk
assessment has been undertaken and results taken into
account.
Risk assessment should be integral to any significant

management or investment decision. There should not be
stand-alone risk assessment, but integrated into any
material decisions, where decision should be considered
only after proper risk analysis has been undertaken. The
level and complexity of risk analysis should be aligned with
the risk appetite and the value of the decision.
Management reporting should include key strategic goals

and KPIs@Risk. Risk reporting should also be aligned with
performance management and employee remuneration.
Those indicators should be inbuilt into existing business

processes and should not exist on their own.
TOPIC 7: Risk Assurance

CHAPTER
Internal Audit IT & Project Assurance
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
Process assurance
TOPIC 8: Risk Reporting

CHAPTER
LEARNING OUTCOME
Passport
Advanced
34
Internal Reporting Definition
Level (X)
Internal risk reporting is the crucial matter in developing

risk culture across an organization: communication risks in
understandable, comprehensive, analytical yet practical
format would in the best way serve to risk culture
development.
Effective communication shall take in consideration general
readiness of the users (audience):
Internal Reporting Tools
Level (X)
avoid too much sophisticated format that would

be not understood;
avoid too much general description of risks that

would not tell much practical information.
Risk managers shall always understand that the higher is

the level of corporate risk information users the more
aggregated and analytical risk report shall be.
Risk reporting for internal users is expected to satisfy to
certain requirements:
-
to provide clear basis for decision-making;
to take into account

information users;
risk
perceptions
by
to take into account objectives and interests of users.

External Reporting
Not entire risks shall be communicated externally but

comprehensive information on risk management system in
place within the organization.
X
Agency theory concerned with so-called agency conflicts

(conflicts of interest) between agents and principals in
agency relationships: (a) between shareholders and
managers and (b) between debt-holders and shareholders.
Communication, Coordination & Writing A
Report
Risk reporting shall satisfy to certain criteria:

-
consequent and comparable information and

format;
regular;
influence, results and outcomes from activities

done to influence either risk probability or risk
impact shall be always indicated;
risk information shall be addressed at the right

level of competence - decision-making (corporate
35
governance) power relevant to risk significance;

-
good balance between quantitative and qualitative

risk information shall be targeted;
risk report format shall be comprehensive for

users, other reporting lines and streams within the
organization shall be certainly taken into account
and coordinated with.

BRECK, THOMAS, Types Of Risk And Types Of Communication
Technology and Market Research: surveys from FORRESTER RESEARCH, GARTNER
WHITE, GERALD I. (2002), The Analysis and Use of Financial Statements, John Wiley & Sons, Inc., 3
edition (topic 9)
rd
International Accounting Standards (topic 9)

ISO 3100 points 5.2, 5.3, 5.6 and 5.7.
COSO Integrated Framework May 2013, Thought Paper Feb 2014, Risk Culture
IRM/Protiviti 2012, Understanding and Communicating Risk Appetite COSO 2012.
GRI Sustainability Reporting Guidelines 2013,
Forrester Wave Q4 2011, Gartner Magic Quadrant.
ISO 2600, UN Global Compact, COM 2011 681, OECD Guidelines, ec.europe.eu, Stakeholder model
Block 06: Specific Risk Management Topics

TOPIC 1: Operational Risk Management
CHAPTER
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
Operational Risk Management - Definition

Operational Risk Management In Industry
Analysing risks loss protection & prevention loss

mitigation solutions in different kinds of risks (property-
36
liability, transport, credit )

Definition and classification of operational risks offered by
GARP
Relationships of three operational risks components:
-
technology development;
business-processes
and
organizational
development (incl. internal control);
human resources development (soft factors shall

be strongly taken into consideration, such as
moral hazard, cognitive biases, institutional
theory).
Concept Layers of Cheese and organizational (corporate)

pathogens by J. Reason
Operational Risk Management In Finance
+ Regulatory treatment of operational risk under Basel II &

III operational risk in various financial institutions
TOPIC 2: Supply Chain Risk Management

CHAPTER
Logistics Management
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
An integrated and comprehensive treatment of logistics

and supply chain management: how firms must logically
link with their supply chain partners in order to gain a
market advantage.
Major economic trends which fundamentally influenced
the supply chain processes are: ongoing advances in ITmanagement, increasing cost pressure, underlining the
role of quality management and customer satisfaction.
Also, the increasing focus on core activities causes large,
often worldwide networks for supply, production and
distribution.
Supply Chain Risk Management
Global supply chains face a multitude of risks; review

structured and systematic approaches for assessing risks in
supply chains
Including logistics, supply chain management, operations
management, strategy, and international business - to
develop a model of global supply chain risk management.
Interconnections between plants, difficulty to calculate the

consolidated margin to declare. Evaluate insurance
response.
37
TOPIC 3: Incident and Claims Management

CHAPTER
Data Base Management
Claims Management
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
Databases are part of many business applications.

Therefore it is necessary for a computer scientist to gain
insight into the technology, the design and the use of
databases. Since the relational database model is the most
widely used model, it is studied quite thoroughly.
Practical working knowledge of handling claims: claims

practices, fraud issues
X
Description of the main actors involved (brokers, experts,

lawyers, insurers)
Key legal points: deductible, limits, value
TOPIC 4: Portfolio, Programs and Project Risk Management

CHAPTER
Project Management With Focus On Risk
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
Project management can be applied to all kinds of

projects, from ICT projects to construction projects, to all
kinds of other projects. Fundamental ideas of project
management: time, resources, cash, quality, etc. Important
to learn planning techniques and many other techniques
that can be applied in project management.
Additional issue, especially for international projects, shall

be compliance risks management, where regulatory
landscape in other countries / locations can differ
substantially from the ones from where the project (and
the team) is originated.
TOPIC 5: Mergers & Acquisitions

CHAPTER
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
38
M&As And Corporate Strategy
Mapping the path to optimise your portfolio

Cooperate in Due diligence process
Define an optimal portfolio of businesses, as well as the
right mix of internal and external growth of businesses
Design a post-M&A integration approach that fits strategic
& risk objectives, while also taking into account human
constraints;
Differences in corporate Risk cultures
Integrates from an insurance point of view: cancellation of

the existing policies, D&O
Description of insurance products to solve a problem in an
M&A deals (legal issue, pollution, liability guarantee)
TOPIC 6: Business Continuity: Emergency & Crisis Management

CHAPTER
Business Continuity Management
LEARNING OUTCOME
Advanced
Level (X)
Level (X)
Learn to embed BCP in the organizational culture:
Disaster Recovery Management
Passport
identifying a crisis situation

deciding how and when to respond
communicating both internally and externally
leading and directing the recovery process
contents of the ISO 22301 standard for BCMS
(Business Continuity Management Systems)
Key concepts of developing business continuity and

disaster recovery strategies, design and implementation of
DR plans, and preparing and conducting awareness and
training programmes
TOPIC 7: Emerging and Future Risks

CHAPTER
Emerging & Future Risks
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
Climate change, nanotechnologies, robotics, wearable

devices
TOPIC 8: Other Topics

CHAPTER
LEARNING OUTCOME
Passport
Advanced
Level (X)
Level (X)
39
Regional Specific Topics
BIBLIOGRAPHY, READING, LEARNING MATERIALS

OLSSON CARL (2002), Risk Management In Emerging Markets: How To Survive And Prosper, Pearson
Education Limited
KVINT VLADIMIR (2009) The Global Emerging Market: Strategic Management and Economics? Routledge
PROTIVITI AND NC TATE UNIVERSITTYS ERM INITIATIVE, Executive Perspectives on Top Risks for 2014
(Key issues discussed in the boardroom and the C-suite Research)
REASON, J. (1990) Human Error, Cambridge: University Press, Cambridge
IRM, Extended Enterprise: Managing risk in complex 21st century organisations
Websites:
www.erisks.com risk related site with up to date news on trends and issues in risk management.
www.iif.com publishes country and regional reports on various emerging market countries.
www.economist.com contains articles and archive material from The Economist including country
surveys.
Foundations of Banking Risk (http://www.garp.org)
Concept Layers of Cheese and organizational (corporate) pathogens by J. Reason:
http://wikibin.org/articles/corporate-pathogens.html
Global Risks (Annual) a Global Risk Network Report of the World Economic Forum
Articles on supply chain risk management
Business case: Ericsson's proactive supply chain risk management approach after a serious subsupplier accident
Basel I, II, III
ISACA papers: (IT Assurance Framework (ITAF); COBIT 4.1; COBIT 5; Val IT; Risk IT)
PMBOK
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European Certification for Risk Managers

Learning Outcomes .......................................................................... 14

Block 01: Essentials of Risk Management (COMPULSORY) ................................ 18

TOPIC 1: Introduction to FERMA Risk Manager Certification (4 Pillars System) ................................................ 18

Block 02: Risk Assessment ................................................................................. 22

Block 03: Risk Treatment I ................................................................................. 26

Block 04: Risk Treatment II ................................................................................ 28

Block 05: Risk Communication, Monitoring & Review ....................................... 31

Block 06: Specific Risk Management Topics ...................................................... 36

Isabel Martnez TorreEnciso

Program Design: Blocks

The program of this body of knowledge is shown in the next table:

BLOCK: BLOCK 2: RISK ASSESSMENT

TOPIC: 2. 3. RISK ASSESSMENT, VALUATION AND QUANTIFICATION

Block 00: Business Basis for Risk Manager

Block 01: Essentials of Risk Management

Block 02: Risk Assessment

Risk & Uncertainty And Impact On Strategy

Block 03: Risk Treatment I

Block 04: Risk Treatment II

Risk Financing Techniques

Block 05: Risk Communication, Monitoring & Review

Risk Culture and the Human Factor

Block 06: Specific Risk Management Topics

Operational Risk Management

Block 00: Business Basis for Risk Manager

Measuring national income and price

Open Macroeconomics, Foreign Exchange Rate

Principles Of Managerial Economics

TOPIC 2: Basic Statistics & Financial Mathematics

Variables, population, samples, measurement of central tendency

Probability Distributions And Descriptive

Regression and correlation, probability, variance and standard deviation,

Estimations, hypothesis testing, hypothesis test

Time Value Of Money

Simple and Compound Interest, Effective Interest Rates, Future value,

TOPIC 3: Basic Corporate Finance

Fundamentals Of Corporate Finance

Goals of Corporate Finance, Finance Function and the Firms Objectives,

Principles Of Valuation And Discounted Cash

TOPIC 4: Financial Statements

Financial Accounting, Financial Reporting And

Basic financial accounting, Financial statements: Balance sheet, Income

Framework For The Preparation And

Profitability And Risk Analysis

Profitability analysis: ROA (return on assets), ROCE (return on capital

TOPIC 5: Basic of General Management

Management Policy And Process

Management of business processes in order to optimise corporate

Introduction To Business Information Systems

Principles Of Organizational Behaviour

Leadership, Values, And Corporate Responsibility

Self-management & develop management skills, understand leadership vs.

Principles Of Human Research Management

TOPIC 6: Legal & Contract Management

Introduction to legal science, basic structures of legal systems, legal

Society And Enterprise & Corporate Social

Understand issues and relationships related with risk

Introduction To International And European Law

Learn to know how to build a management process which identify the

Learn to know about the principles of conduct governing an individual or a

TOPIC 7: Basic Marketing

Understanding the Role of Marketing

Strategic approaches to the planning process, mass marketing versus