DEEP Insight

Managing Risks Effectively Premium

Risk need not be so fearsome, provided you arm yourself with the winning advice of this dossier.

This executive dossier includes the following articles:

A Better Way of Managing Major Risks Premium

Strategic Risk Management

Bromiley, Philip; Rau, Devaki

In trying to identify all the risks a firm faces, managers can turn risk management into an overwhelming paper-processing exercise that distracts them from focusing on the risks that really matter -- namely, strategic ones that threaten the firm's existence. By not being able to grasp the assumptions and limitations of complex and costly Enterprise Risk Management (ERM) tools and models, managers may be operating under a false sense of security. Based on their research on firm risk-taking and risk management, the authors offer nine practical suggestions to help managers make the risk function more meaningful and relevant. A healthy dose of skepticism, prudence and resilience will go a long way toward helping your firm see the forest rather than the trees.

Risk Oversight: What Every Director Should Know Premium

Are Risky Boards Getting Riskier?

Ormazábal, Gaizka

The public and political perception that excessive risk-taking was to blame for the global financial crisis has led to a number of legislative and regulatory actions concerning the role of the board in risk oversight. This article discusses the main factors driving the pressure on boards to oversee corporate risk and the potential consequences of this emphasis on risk oversight. The author describes how companies are responding to the higher demand for board involvement in risk management -- particularly as what began as a distinctly U.S. trend is crossing the Atlantic and being felt in European boardrooms.

12 Pitfalls to Avoid on the Path to Managing Reputational Risks Premium

Engaging Your Stakeholders

Henisz, Witold J.

Engaging with your external stakeholders is an essential means by which companies not only reduce risk and preempt future crises, but also generate value for shareholders and society alike. So why do executives appear to ignore "corporate diplomacy," which in many ways is one of the best resources in the executive toolkit to help manage risk effectively? Drawing on his DIPLOMat framework, the author answers this question by showing the myriad ways that executives are frequently stymied in their efforts to maximize their stakeholder potential. He sketches out the 12 biggest risks to avoid. By identifying the main risks in the stakeholder environment, executives can mitigate their adverse impacts and seize their upside opportunity.

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