|Board Perspectives - Risk Oversight Issue 10 – Aligning Strategy Setting and Performance Management with Risk|
Effectively integrated with strategy-setting and performance management, risk management invigorates opportunity-seeking behavior by helping directors and managers develop the confidence that they truly understand the risks inherent in the organization’s strategy and have the capabilities in place to manage and monitor those risks. Additionally, a disciplined approach to understanding the potential downside of the strategy for creating value and the extent to which worst case scenarios might hurt will help management and the board know what to watch over time. The message is not about risk avoidance; it’s about everyone who matters being knowledgeable of the risks undertaken. Risk management is flawed when risks are evaluated after the strategy is formulated. The end result could be strategic objectives that are unrealistic and risk management that is simply an appendage to performance management. Board Perspectives - Risk Oversight Issue 10 – Aligning Strategy Setting and Performance Management with Risk discusses how to achieve this vital connectivity.
Making Your Risk Assessments Count: A Strategic Perspective
A common question we often hear from senior executives and directors when a company completes a risk assessment is, “How do we know we have a full picture of the risks that matter?” And a common observation voiced is, “The risk assessment process doesn’t tell me anything that I don’t already know.” This issue of The Bulletin discusses the risk assessment process, including why traditional approaches aren’t meeting expectations and what can be done differently to increase management’s confidence in the process going forward. In this issue, we will discuss a strategic perspective to assessing risk. In the next issue, we will explore an operational and a compliance perspective to assessing risk.