Our CFO Lens provides a number of articles around risk, particularly for CFOs ranging from the Future of Risk to Making Risk Management Part of Strategy. In this article, we take a brief look into insights around where risk is going and how to manage it as part of strategy.
Future of Risk
The risk landscape is rapidly changing with daily headlines bringing new reminders that the future is here and it is not showing signs of slowing down. We have entered the fourth industrial revolution, enabled by technology and driven by constant disruption. In the past, risk management was often an exercise implemented as a result of fear and avoidance, with organisations focused primarily on completing necessary, compliance-driven activities. This is changing with many leaders now viewing risk in terms of their potential to create value and drive performance.
Our article on the Future of Risk outlines the new rules to navigate the new game wrought by the age of digitisation.
Making Risk Management Part of Strategy
Deloitte Independent Senior Advisor and retired CFO of Walmart, Charles Holley writes on how he integrated risk assessment and management with strategic planning and execution, bringing enterprise risk management (ERM) into the corporate centre. Drawing on his experience, he shares a few steps on how CFOs can incorporate ERM into strategy, these are:
- Establish a strategic risk-awareness culture
- Establish a robust ERM process that runs parallel to strategy development and goes deep into the company
- Centrally locate ERM and staff it with people who have a strategic mindset
- Leverage the board
- Gain buy-in from business unit leaders
Holley believes that with these, organisations are better equipped to assess risk relative to the strategy and decide how to address it proactively.
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