The board’s role in cultivating a risk-intelligent culture

Deloitte 04/2013

Cultivating a risk-intelligent culture is more than establishing a code of ethics and completing a risk assessment. Economic events have highlighted weaknesses in many organizations in the area of risk governance and management. They have also catalyzed many organizations to devote significant time to developing and implementing enterprise risk management frameworks, policies, procedures, and technologies. Recent studies, such as 2012 Board Practices Report: Providing insight into the Shape of Things to Come, a publication from the Deloitte Center for Corporate Governance and the Society of Corporate Secretaries and Governance Professionals, suggest that there has been progress in revamping governance practices and establishing infrastructures, but there is still a considerable need for cultivating risk-intelligent cultures.

What is risk intelligence? Leo Tilman, a Columbia University professor and author,defines risk intelligence as “The organizational ability to think holistically about risk and uncertainty, speak a common risk language, and effectively use forward-looking risk concepts and tools in making better decisions, alleviating threats, capitalizing on opportunities, and creating lasting value.” He notes that risk intelligence is essential to the survival, success, and relevance of companies and investors. Continue reading…

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