IT Governance: Implementing Frameworks and Standards for the Corporate Governance of IT

CHAPTER 4: GOVERNANCE AND 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, and effective risk management has become a key competitive differentiator. The modern corporation’s fundamental goal is to create and add value to its business on a continual basis. This means that boards must find an appropriate balance between profit maximisation and risk reduction.

Strategic risk can be described as the enterprise-level risk of a negative impact on earnings or capital arising from an organisation’s failure to create and execute appropriate business plans and strategies, improper implementation of decisions, or lack of responsiveness ...