CHAPTER 3: STRATEGIC AND OPERATIONAL RISK MANAGEMENT
Risk management has always been a key governance issue. The board’s job is strategy and, therefore, strategic risk has always been a board responsibility. The modern corporation’s fundamental goal is to continuously create and add value to its business. This means that boards must find an appropriate balance between profit maximization and risk reduction.
Strategic risk can be described as the enterprise level risk of a negative impact on earnings or capital arising from an organization’s future business plans and strategies, improper implementation of decisions, or lack of responsiveness to industry changes. It includes risks associated with plans for entering new businesses, expanding ...
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