Businesses can take 10 steps to address weaknesses in risk management, according to "Managing Risk in Perilous Times: Practical Steps to Accelerate Recovery," a report by the Economist Intelligence Unit Ltd. that examines academic and industry thinking concerning risk management. The steps are: 1 Risk management must be given greater authority 2 Senior executives must lead risk management from the top 3 Institutions need to review the level of risk expertise in their organization, particularly at the highest levels 4 Institutions should pay more attention to the data that populates risk models, and must combine this output with human judgment 5 Stress testing and scenario planning can arm executives with an appropriate response to events 6 Inventive systems must be constructed to reward long-term stability, not short-term profit 7 Risk factors should be consolidated across all of the institution's operations 8 Institutions should ensure that they do not rely too heavily on data from external providers 9 A careful balance must be struck between the centralization and decentralization of risk 10 Risk management systems should be adaptive rather than static. Download a copy of the report and read solutions
Industry IQ: Report: 10 steps to address risk management flaws
Businesses can take 10 steps to address weaknesses in risk management, according to "Managing Risk in Perilous Times: Practical Steps to Accelerate Recovery," a report by the Economist Intelligence Unit Ltd. that examines academic and industry thinking concerning risk management. The steps are: 1 Risk management must be given greater authority 2 Senior executives must lead risk management from the top 3 Institutions need to review the level of risk expertise in their organization, particularly at the highest levels 4 Institutions should pay more attention to the data that populates risk models, and must combine this output with human judgment 5 Stress testing and scenario planning can arm executives with an appropriate response to events 6 Inventive systems must be constructed to reward long-term stability, not short-term profit 7 Risk factors should be consolidated across all of the institution's operations 8 Institutions should ensure that they do not rely too heavily on data from external providers 9 A careful balance must be struck between the centralization and decentralization of risk 10 Risk management systems should be adaptive rather than static. Download a copy of the report and read solutions
