Major Corporations Lack Risk Management Strategies

Even the largest and most successful businesses have something to learn when it comes to managing risk.

Companies are working harder to identify potential risks to their business, but many still fail to incorporate those risks into strategic plans or inform the board of directors,” writes Wall Street Journal senior editor Emily Chasan.

In her article appearing in July 3rd edition of the WSJ’s CFO Journal section, Chasan discusses a survey of 100 senior financial executives done by APQC, a nonprofit business research firm.

The survey found that fewer than one in five executives say their companies effectively manage newly identified strategic risks, with most companies failing to implement procedures to lessen risk.

Two out of three companies in the survey (which included large public and private companies with global operations) said they do not have a process for ensuring that strategic risks are included in the company’s strategic plans, while 43% reported to not have an established method for reporting risk to their board.

Risk management software enables companies to take the guesswork out of big decisions and to plan strategies with confidence. Tools like Palisade’s @RISK are used across industries to identify and minimize risk.

 

 

2 comments

  1. I’m a big fan of @Risk but I think saying it can be used to identify risks is probably pushing it a bit and as for minimising risks, what if their impacts are beneficial? Why minimise that?

    I’m a modeller but I have to say that there is a whole big world of risk management beyond quantitative modelling. Take a look at http://au.wiley.com/WileyCDA/WileyTitle/productCd-1118820312.html for starters. For the purposes of full disclosure, I’m one of the authors but I don’t know an easier way to illustrate the point

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