Document Type

Article

Publication Date

10-1-2008

Publication Source

Internal Auditor

Abstract

Organizations should not only recognize and minimize traditional downside risks, but also embrace upside risks, or opportunities, as a strategy for success. According to a 2005 survey by management consulting firm Booz Allen, 87 percent of the market value lost by large companies with market capitalizations over US $1 billion was the result of strategic and operational blunders. Compliance failure, typically the focus of downside risk, destroyed only 13 percent of market value during the five-year study. Faced with this counter-intuitive finding, companies may wish to pursue a more balanced and positive approach to risk management. Enterprise risk management (ERM) goes beyond mere risk mitigation and compliance--it requires a deep appreciation of upside risks, as well.

Inclusive pages

53-58

ISBN/ISSN

0020-5745

Document Version

Published Version

Comments

The document available for download is provided with the permission of the publisher. Permission documentation is on file.

Publisher

Institute of Internal Auditors

Volume

65

Issue

5


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