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The author challenges four "icons" that have grown insidiously and perniciously within the discipline of risk management: first, that "risk" is bad; second, that the primary goal of risk management is to benefit shareholders; third, that risk management is the responsibility of specialists; and, fourth, that risk can be transferred.

Launch a new product? Enter a new market? Invest in a cost reduction program? Do nothing? No matter what you do there is risk. This month Professor Allen begins a multi-part series examining the nature of risk and making decisions under risk.

Find Part 2 at:
http://www.babsoninsight.com/contentmgr/showdetails.php/id/564

see related articles at
http://www.mbadepot.com/links/links.php?ID=1100

Wharton professor Howard Kunreuther looks at the bankruptcies of Barings Bank and Arthur Andersen, and the severe losses incurred by Union Carbide and Lloyd's of London after a series of disasters, and he sees a common thread: How the actions of one division or plant severely damaged the whole company. In a recent paper, Kunreuther analyzes the challenges organizations face in dealing with low-probability events that have large-scale consequences, looking specifically at how to encourage divisions within firms to invest in protective measures when other divisions don't.

Most corporate risk managers are more concerned about potential catastrophes and financial risk than about operational risks like fraud and mismanagement. As recent events have shown, such inattention can be fatal. Is it time to change your company's risk management culture?

You're insured and hedged against many risks-but not the greatest ones, the strategic risks that can disrupt or even destroy your business. Learn to anticipate and manage these threats systematically and, in the process, turn some of them into growth opportunities.

The challenges facing corporate boards have grown. We have all seen how crises have affected entire business sectors. These are "turbulent times" that require plans and policies designed to prevent and/or mitigate risks and possible crises. This article looks at the latest best practices for Boards and management from a recent study by the National Association of Corporate Directors.

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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New research relating to 'extreme events' should help senior executives to capitalise on sharp upward movements in their share price - and counteract falls.

Editor's Note: read a challenge and response to the arguments of this article at
http://www.ebfonline.com/at_forum/at_forum.asp?id=423

Can you predict a business disaster? In this Harvard Business Review excerpt, professors Michael D. Watkins and Max H. Bazerman outline the keys for disaster prevention: recognition, prioritization, and mobilization.

Editor's Note: mostly pure common sense with no actual prescriptions for improvement...

Suddenly your supply chain is full of weak links, everything from terrorism to political instability to dock strikes. Could you and your customers withstand a disruption?

You can outsource many things, but operational risk is yours to keep. Protect yourself and your company with a contract that mitigates the risks.

Note: Darwin Magazine is now dead. Some articles are moving to CIO. I will try to update the links when I have time...

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What do you outsource and where? Or do you outsource at all?
The answers depend on how you determine your risk.

In a changing environment where even everyday activities are filled with risk, sometimes it's difficult to see that, when it comes to business, risk is neither bad nor the enemy.

Technology may have afforded fantastic opportunity, but it also exposed companies to all kinds of peril. CEOs ponder their roles as risk managers and how they can keep their companies safe in this Chief Executive CEO roundtable.

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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Business and risk have always been inseparable, if not synonymous. But given current geopolitical instability, gyrating stock markets and the fragility of most new business models even the most tough-minded entrepreneurs are struggling to remain sanguine.

Is it really true, though, that the corporate environment is markedly more risky than in earlier times? Has the increased scale of risk not been matched by advances in our understanding of how to cope with it? How can companies implement risk management procedures without stifling innovation? What should boards do to show a lead?

Editor's Note: I found the articles by Michael Mainelli and Ulrich Beck to be the best of the lot...

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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Michael Power says we must be careful in blaming individuals for disasters. The root causes of risk are more likely to be found in the "mundane transactional life of organisations."

In this article, we detail the differences between conventional enterprise risk management and enterprise resilience, and explain why a keen understanding of the distinction is essential today, when the boundaries of every major corporation have expanded, increasing a company's vulnerabilities and its potential for competitive advantage. We also identify how senior executives can assess their organization's resilience profile and risk management approach. And we explain how corporate managers can align risk mitigation strategies with the most significant earnings-driver risks, and close dangerous gaps in their company's resilience profile.

Business insurance claims are rising, with no end in sight. To help finance executives stem financial losses, we asked risk managers, insurance claims specialists, brokers and consultants what companies should do - and what they should avoid doing - when a loss occurs. Here is their advice.

Many companies are investing in or selling to overseas markets without adequate due diligence. Using commercial sources for risk analysis, maintaining regular contact with local people and developing a cross-functional risk management strategy can lead to a safe journey.

It's good to take risks - if you manage them well.

Companies on the front lines of the phishing wars share tactics for making their sites spoof-proof and protecting online transactions.

Are you on board with enterprise risk management? You had better be. It's the future of how businesses will be run.

Sometime in the last decade, IT passed a major risk inflection point at most companies. Today, it's almost universally true that the cost of potential IT-related failures and other risks is far greater than the cost of the investment in IT itself.

In an intricately networked world, the study of "nonequilibrium" systems is teaching companies how to overcome risk.

A new form of decision analysis is helping executives reevaluate risk management.

Beyond earthquakes and currency fluctuations, there's a broad array of strategic risks poised to disrupt or even destroy any business. But embracing risk is also part of the growth equation. Is your business prepared? And what are the risks you should be taking but aren't?

Facing an online extortion threat, Mickey Richardson bet his Web-based business on a networking whiz from Sacramento who first beat back the bad guys, then helped the cops nab them. If you collect revenue online, you'd better read this.

Risk management has become an area of significant concern for numerous companies in today's volatile marketplace. However, a number of executives are still grappling with what needs to be done to protect their organizations.

A logical starting point is to gain a better understanding of the true risks facing companies. To accomplish this, Deloitte & Touche LLP and Deloitte Research, a part of Deloitte Services LP, analyzed the possible causes of major loss of share value experienced by hundreds of the largest international companies over the last 10 years. Some of the results were expected, such as the major negative impact of the September 11, 2001 terrorist attacks. Yet other results yielded some surprises, which have been compiled into a new Deloitte Research white paper, "Disarming the Value Killers."

The research found that risks may lurk in unexpected places, and that certain events can have such devastating effects that many organizations never recover from the losses. In the paper, Deloitte identifies which factors potentially became "value killers" and explains what might be done to address such threats.

The idea that there is a relation between risk and returns is a cornerstone of modern portfolio theory. And yet, the concept has yet to affect the way most companies manage the real assets of the corporate portfolio. It's an enormous missed opportunity. It is possible to integrate a rigorous assessment of uncertainty and risk into the very process of setting portfolio strategy. The result is a far more comprehensive and realistic approach that can fundamentally transform how senior executives manage the corporate portfolio.

What should you be doing to manage supply chain risk? As supply chains grow ever more complex, the question has never been more difficult to answer.

In business, in government, in diplomatic affairs, anywhere that you are confronted with a need for change, you have to ask: Is it effective to make large, radical changes? Or is it more advisable to merely "muddle through"?