12 Jan From “Tactical Risk Management” to “Strategic Risk Thinking”
With risk management processes well established in many organisations at the tactical or operational level, Executives and Boards are increasingly focussing on how to use risk management to not only protect shareholder value, but to act as an enable in creating value. To achieve this, risk thinking needs to be directly aligned to an organisation’s strategic decision-making, thus ensuring all significant decisions are supported by a rigorous approach to the identification and evaluation of risk. A critical component of this approach is to develop a common language for the evaluation of risk which is closely aligned with corporate key performance objectives, and an agreed risk tolerance and risk appetite for the organisation.
Several published reports and surveys from 2013 support this shift, including a recent report from the AICD which re-enforces the view that the risk landscape is changing; risk management is no longer being seen as an overly bureaucratic compliance process, but rather as an enabler to achieving organisational objectives. “Boards consistently ponder how to integrate risk management into the strategic decision-making activities of the business. These days, risk management no longer should be seen as a parallel set of non-value-adding practices.”
Riskwest has significant experience in assisting Boards and Executives to understand an evaluate their strategic risks, bringing structure and alignment to an organisation’s risk thinking.
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