Deloitte Provides Advice on Risk Assessment
A new Risk Angles issue from Deloitte, Five questions on risk assessment, takes a few commonly asked questions about risk assessment and provides short answers to each. The two page document is an easy read and I recommend it for boards and executives, as well as practitioners.
I particularly like these quotes:
- “Your risk assessment process should incorporate monitoring activities as dynamic as your business and the threats and opportunities it faces”
- “Some organizations are developing near real-time monitoring capabilities for internal and external conditions using big data mining, text analytics, and data visualization techniques. These mission control centers can feed actionable information to decision makers and form the basis for a dynamic risk assessment process”
- “An effective risk assessment may equip leaders with the information they need to take advantage of value-creating risks”
- “Technology can make it easier to micro-target particular audiences and risk challenges, analyze large amounts of data from different parts of the business, and develop actionable intelligence. But technology is only as good as the underlying processes you have in place, and the people running them”
- “Trying to define a single risk appetite for an organization is usually not practical. In reality, different organizations have different appetites for achieving certain types of objectives — or not achieving them at all”
The piece is fine as far as it goes. I only wish it would ask and answer questions that would help ensure the risk assessment process is capable of addressing all significant risks to the achievement of objectives. For example, few consider the uncertainty inherent in operating assumptions and the actions necessary to optimize potential outcomes. This is discussed in an earlier post of mine, Why I worry first about Uncertainty and then about Risk.
I welcome your comments.