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Strategic Risks—Risks that relate to doing the wrong thing.
Environment Risks:
• Natural and man-made disasters
• Political/country
• Laws and regulations
• Industry
• Competitors
• Financial markets
Organization Risks:
• Corporate Objectives and Strategies: planning; resource allocation; monitoring; mergers, acquisitions, and divestitures; joint ventures and alliances
• Leadership: vision, judgment, succession planning, tone at the top
• Management: accountability, authority, responsibility
• Corporate Governance: ethics, reputation, values, fraud and illegal acts
• Investor/Creditor Relations
• Human Resources: performance rewards, benefits, workplace environment, diversity
Operating Risks—Risks that relate to doing the right things the wrong way.
• Workforce: hiring, knowledge and skills, development and training, size, safety
• Suppliers: outsourcing; procurement practices; availability, price, and quality of suppliers’ products and services
• Physical Plant: capacity, technology/obsolescence
• Protection: physical plant and other tangible assets, knowledge and other intellectual property
• Products and Services: development, quality, pricing, cost, delivery, consumer protection, technology/obsolescence
• Customers: needs, satisfaction, credit
• Regulatory Compliance: employment, products and services, environmental, antitrust laws
Financial Risks—Risks that relate to losing financial resources or incurring unacceptable liabilities.
• Capital/Financing: availability, interest rates, creditworthiness
• Investing: cash availability, securities, receivables, inventories, derivatives
• Regulatory Compliance: securities law, taxation
Information Risks—Risks that relate to inaccurate or irrelevant information, unreliable systems and inaccurate or misleading reports.
• Information Systems: reliability, sufficiency, protection, technology
• Strategic Information: relevance and accuracy of measurements, availability, assumptions
• Operating Information: relevance and accuracy of measurements, availability, regulatory report in
• Financial Information: relevance and accuracy of measurements, accounting, budgets, taxation, financial reporting, regulatory reporting
Environment Risks:
• Natural and man-made disasters
• Political/country
• Laws and regulations
• Industry
• Competitors
• Financial markets
Organization Risks:
• Corporate Objectives and Strategies: planning; resource allocation; monitoring; mergers, acquisitions, and divestitures; joint ventures and alliances
• Leadership: vision, judgment, succession planning, tone at the top
• Management: accountability, authority, responsibility
• Corporate Governance: ethics, reputation, values, fraud and illegal acts
• Investor/Creditor Relations
• Human Resources: performance rewards, benefits, workplace environment, diversity
Operating Risks—Risks that relate to doing the right things the wrong way.
• Workforce: hiring, knowledge and skills, development and training, size, safety
• Suppliers: outsourcing; procurement practices; availability, price, and quality of suppliers’ products and services
• Physical Plant: capacity, technology/obsolescence
• Protection: physical plant and other tangible assets, knowledge and other intellectual property
• Products and Services: development, quality, pricing, cost, delivery, consumer protection, technology/obsolescence
• Customers: needs, satisfaction, credit
• Regulatory Compliance: employment, products and services, environmental, antitrust laws
Financial Risks—Risks that relate to losing financial resources or incurring unacceptable liabilities.
• Capital/Financing: availability, interest rates, creditworthiness
• Investing: cash availability, securities, receivables, inventories, derivatives
• Regulatory Compliance: securities law, taxation
Information Risks—Risks that relate to inaccurate or irrelevant information, unreliable systems and inaccurate or misleading reports.
• Information Systems: reliability, sufficiency, protection, technology
• Strategic Information: relevance and accuracy of measurements, availability, assumptions
• Operating Information: relevance and accuracy of measurements, availability, regulatory report in
• Financial Information: relevance and accuracy of measurements, accounting, budgets, taxation, financial reporting, regulatory reporting
