Business risk is the level of exposure to uncertainties that the enterprise must understand and effectively manage as it achieves its objectives and creates value. It is not just about threats; there is an upside as well as a downside. Risk is not about a single point estimate—time frame is an important factor when evaluating risk, and exposure and uncertainty are important factors.
Over the last year, we've seen unemployment rates decrease and consumer confidence make a comeback, but that doesn't mean that business risks have evaporated. In fact, as the global business environment rapidly evolves, new opportunities and challenges present themselves, bringing new risk dialogue topics to boardrooms and executive offices around the world.
We all know that change is inevitable, but what can an organization do to keep its strategies and risk management capabilities on the same course as the ever-changing business environment?
Throughout the year, Protiviti conducts research and publishes insightful thought leadership on a broad range of issues affecting publicly held companies, ranging from today’s top risks to internal audit, SOX compliance, and IT security and privacy. Protiviti also regularly addresses key market developments, such as this year’s release by COSO of its new Internal Control – Integrated Framework.
Many lessons were learned from the financial crisis. For example, if a chief executive ignores the warning signs posed by the risk management function, resists contrarian information suggesting the corporate strategy is either not working or losing relevance, or fails to consider critical risks when evaluating whether to enter a new market or consummate a complex acquisition, the shareholders and other constituents can end up paying a high price.
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