Thursday, February 25, 2010

Strategic Risk

Risk management has a history of sloshing about in the nether regions of the organisation: focussing on operational type risks, processes, insurance, that type of thing. Don't get me wrong, I think those things are important, but shouldn't we be dealing with the strategic issues? You know, M&A, what is the future of the organisation? What is coming at us over the horizon?

I have a view that we should be looking a lot more at strategic risk, and I like to tie it back to value drivers (via objectives?) such as those that drive shareholder value (or whatever your equivalent might be for our organisation).

This leads me to pose several questions:
  • Do we as a profession have enough face time with the CEO and Chairmen of our organisations?
  • Do we get involved in strategic plans before or after they happen? eg, do we get involved in risk based due diligence after the transaction is announced, or when options for acquisitions are being discussed?
  • How often do we, as a profession, facilitate board awaydays focussing on more distant strategy (say 5 to 10 years out)?
  • Does anyone have any really good war stories on this that you are happy to share on line?



1 comment:

GlobalRiskConsult said...

Hi Richard,
Good points. I have not seen yet that M&A proposals go through Risk management depertment. The guys from M&A departments always do their DD, but probably RM should look into the proposal under another angle.