In his second article Neil Britten outlines the reasons behind failing to identify strategic risks, an essential role for board directors.
We are sometimes asked, what is strategic risk governance? Let’s look at the underlying concepts:
Strategy is a coherent set of choices about how to achieve a company’s goals in the face of uncertainty, with limited resources and an acceptable degree of risk.
As we use the term, risk is the potentially negative effect of uncertainty on important outcomes; some uncertainties are existential—they threaten the very survival of the organisation.
And governance is the process of decision-making about priorities, policies and practices, by
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