How do organisations ensure that they achieve their strategic objectives despite astonishing uncertainty and turbulences? What is their appetite for risk and risk tolerance? What are the best ways for boards to make certain that enterprise value and risk are being appropriately managed?
These are some of the critical questions in the minds of executives and board directors. Organisations need to survive and thrive despite increasingly volatile conditions.
Principles for building a Risk Intelligent Enterprise
As a result of these conditions, there is now an urgent need for organisations to review their approach to risk management and become risk intelligent. Risk Intelligent Enterprises maintain a balance between risk (threat) and reward (opportunity), ensuring that some risks are taken to create future value and others are avoided to protect existing value.
To maintain alignment between risk exposures and business strategy, a Risk Intelligent Enterprise draws on the co-ordinated efforts of three levels of risk management responsibility:
Risk governance, including strategic decision making and risk oversight, led by the board of directors
Risk infrastructure and management, including designing, implementing, and maintaining an effective risk management programme, led by executive management
Risk ownership, including identifying, measuring, monitoring, and reporting on specific risks, led by the business units and functions
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For a more detailed discussion on risk intelligence, feel free to contact Dave Kennedy (Service Line Leader – Risk Advisory at Deloitte Africa) at email@example.com