There have been interesting developments in risk management lately, as evidenced by one new book and one new standard.

The standard is ISO 31000, which GRC analyst Michael Rasmussen lauds for its “simplicity and adaptability” in this post.

Rasmussen contrasts this new standard with the COSO ERM Integrated Framework, which he describes as lacking the “pragmatic simplicity and agility that ISO 31000 delivers.”

The book is Harvard-trained economist and strategist Mia de Kuijper’s Profit Power Economics, which shows how a business can better control profits while – and by – spreading the risks.

Pepsi-Cola is featured as a prominent case example. The company owns global brands but not the parts of the “value system” where most of the grunt work is performed (and, important, where large capital expenditures are required). Pepsi-Cola balances the economics and risk-sharing so that they receive superior return on capital. The book shows why their returns, in many ways, are relatively risk-free because they don’t need to own a truck, hire a deliveryman, or run a filling line. ###