A conversation with a friend about a book called ‘Start with Why’ helped me to put some order to my thoughts about the value of risk management.
At one level the question of ‘why risk management’ can be answered by saying that it adds value to the business in the medium to long term.
This is not a rhetorical question given the sums of money and senior management time that are being devoted (or is it diverted?) to risk management.
But, how can we identify the value of risk management?
This is not a simple question. I believe that there are two broad aspects to consider to answer this question. Firstly, it is about identifying the right objective. Secondly, it is about evidencing that pursuing the objective of risk management generates value.
I intend to cover these issues in future posts from the perspective of financial services. It will also be interesting to hear your thoughts and evidence about the value of risk management.
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