We aren’t technically in a recession (that we know of), but it’s not looking good!
Troubled economic times make your clients and prospects price shop; that increased competition is the icing on the cake for brokers who are also struggling with the economy. A slight change in approach can go a long way toward growing brokerage revenues and weathering the economic storm.
Tom Cooper is currently an Assistant Professor at Memorial University in the area of strategic management. As a member of ClearRisk Board of Advisors, Tom’s research and blogging focuses primarily on the interplay between strategy, risk and compliance as well as their effects on corporate responsibility. ‘Strategic Risk as an Element of Operational Risk’ is the fourth in this ongoing series.
Although the Basel II guidance on strategic risk is regulatory driven, this definition of strategic risk provides little assistance on how strategic risk might be identified and analyzed. There is also considerable potential overlap with the standard Basel II definition of operational risk, which is: “the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events”.
Risk management is much wider than simple financial or operational risk. Concepts such as ‘strategic risk management’, ‘integrated risk management’ and ‘enterprise risk management’ now describe the wider application of such thinking, tools and techniques.
There is a common view that strategic risk is about managing risk ‘strategically’ rather than examining strategic risk as a category similar to operational, financial and other risk areas. This common view causes confusion and may be one of the reasons that strategic risk is not further researched or specifically managed.
On a recent family vacation to Disney World, my mind couldn’t help but wander back to the office as I walked around the various theme parks.
I have met Disney’s risk manager, Stephen Wilder, in the past and have seen him speak on risk management at Disney. I have also noticed various aspects of it here on previous trips, but this time, something occurred to me that hadn’t before.
Today is the 12-year anniversary of ClearRisk!
On the eve of the RIMS Canada Conference, which is in our hometown of St. John’s this year, and being our anniversary, it has caused me to be introspective on where we’ve come from and where we are going.
