Enterprise Risk Management
Alan Kennedy, Canada
While I agree with Mr. Devera's observation that risk has become a part of every corporation, I am not sure that risk is being managed well.
In my book, The Alpha Strategies
, Understanding Strategy, Risk, and Values in Any Organization, I make the case that risk is one of eight strategies common to all organizations, regardless of whether they are for-profit, not-for-profit, or public sector organizations.
Any of those eight can be the dominant strategy leading the remaining seven.
is the dominant strategy for regulatory agencies, police services, insurers, and pension funds.
But whether risk is the dominant strategy or not, the focus of the risk strategy is always on the threats or opportunities faced by the other seven strategies. We don't tend to look at risk that way in most organizations. Instead, we focus, as Mr. Devera notes, on objectives set by management.
Those objectives never seem to touch on more than two or three of the eight common strategies, making risk management very problematic.