Strategic Risk A Guide for Directors

The success of enterprises can often be attributed to their successful management of strategic risk. Conversely, failure to manage strategic risk can lead to often catastrophic consequences - Enron, Arthur Anderson, Kvaerner and Equitable Life were all seriously affected by a failure to think sufficiently about strategic risk.

Most organisations have well embedded procedures for assessing and mitigating project and operational risks. Strategic risks are an order of magnitude greater and, by their very nature, involve a wider range of uncertainty and the interaction between a large number of factors, with major benefits accruing from managing them well and often dire consequences from the failure to manage them effectively.

This major new printed guide and CD, compiled by a group of industry experts working under the auspices of the DTI, the Institution of Civil Engineers and the Actuarial Profession, presents in a succinct and cogent way a recommended approach to the management of strategic risk, STRATrisk, and an explanation of how to apply the approach.

Among the practical steps recommended are:

• examination of the key processes already embedded in the organisation to see whether they contain hidden strategic risks
• adequate follow-through from risk identification
• the use of tools such as horizon scanning, concept mapping, pattern recognition and risk grouping

The CD amplifies the information contained in the printed guide and provides video clips and a number of case studies.i

'Reading this report will make company directors think hard - and few will decide to ignore its cogent and direct advice * Very well written. Not a wasted word * Cameo case studies very helpful to illustrate the points made in the text * --Dr Martin Barnes, Executive Director, The Major Projects Association and President, The Association for Project Management

Strategic risk (STRATrisk) encompasses the most important risks that an organization might face, that would make a major difference to its ability to achieve its main objectives, or even to survive. This Guide is directed at the board level, where responsibility for STRATrisk must lie. I thoroughly recommend it. --Lord Broers, President of the Royal Academy of Engineering