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Little Green Men Make the List of ‘Extreme’ Risk Factors

An article on CFO.com makes for some interesting (albiet brief) reading. Based on a report by Towers Watson, there are a whole bunch of risks that businesses should at least be aware of. Divided into 6 categories: Financial, Economic, Political, Environmental, Societal and Technological. What's your take? Are they a little out there on the fringe or has your reality/perception been adjusted?

Answers

Richard Cromwell
Title: Chief Executive & Principal Client Advis..
Company: ControlWorkx
(Chief Executive & Principal Client Advisor, ControlWorkx) |

You can really build a huge list quickly when thinking of categories of risk and the more people you ask, the more categories. I have seen risk databases with 1000's of risks. The key is to keep it simple. You might start with "Industry Risks" [Risks that one normally incurs when doing business in an industry - Regulatory, Governmental, Competitors..], Then "Company Specific Risks" [Strategic, Assumed and Operational] These areas will put the meat on the bone. Strategic might include "Decision Quality", Brand/Reputation..appetitie/tolerance..etc] Assumed Risks involve the actual risks you get paid to take as an organization. The Operational risks are the ket policies, processes and procedures in place to conduct and process business [ Business Lines, Technology, HR, Compliance..etc] All should be narrowed down to 10 or 12 "Top Risks" [Risks that cut across the whole organization and create "systemic risks". Bigger is not better - A concise risk Profile, where each risk is clearly defined, ownership assigned and reported on is the key.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Well stated Richard.

An area which doesn't seem to interest most here, BCP (Business Continuity Planning) which includes Disaster Recovery (for both the Company and IT), Mitigation, Continuity of Operations etc can't be planned for every contingency, so picking the most likely is the best practice.

Now being a Star Trek fan, there were many races which were green, not necessarily little and many benign, so I would rate that risk as rather low. On the other hand Romulans, Klingons, The Breen among others, that's a different issue.

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