Thursday, 24 April 2008
Future of Risk Management in Business
Risk management in organisations has typically been used as an isolated function aimed mainly at ensuring compliance (e.g. with regulation) and to avoid losses. Surveys have shown that top business executives expect the next ten years to be more complex for their organisations, and to experience considerably more risk across most corporate activities. There is a general feeling of inevitable increases in uncertainty, complexity and dynamism. This is leading to risk management shifting to become a strategic tool that supports organisations. Some companies are even appointing Chief Risk Officers at board level to report and oversee such activity. It involves companies using techniques such as scenario planning and external unencumbered expert advice to ask questions about what the impact of investing in certain areas might be. The external or third party input is particularly valuable when considering disruptive technology impact, as there is always a temptation to see the future through the prism of the present.