My interview was with a manager out from the US. I remember he explained to me the company was very big on risk analysis and that they ran their organisation right on the edge of investment grade when it came to how the credit rating agencies like Moody and AM Best saw their stock and debt instruments.
He practically boasted about how they took big calculated risks, right around that edge.
That company was Enron. One of the biggest corporate disasters of the 2000s. It turned out that some of their risks came back to bite them and they entered into a series of fake holdings and kept a few other mishaps off the books. Eventually they could hide it no longer and they went belly up. Catching many, many people by surprise.
As I have said before. Choosing a risk appetite is one thing. Choosing an appropriate one that is followed by all staff is a different proposition.
You can read more on my thoughts on Risk Appetite here and download my paper, “Risk Appetite: Embed it deeply into your DNA” from there. If you are interested in having a conversation on how to bring value to an organisation through a risk appetite statement, please come join me and a group of other risk professionals at my group mentoring program that starts on Friday, 15th March 2019 in-person and streamed online.
Bryan's new book teaches you practical methods to cut through with your advice and make the impact you want to make. Available on Amazon or order here now.
YOUR DECISIONS DEFINE YOU.
Available on Amazon or order here now.
Bryan Whitefield works with strategic leaders across all sectors to help organisations harness uncertainty – uncertainty is the strategic leader’s best friend. He is the author of DECIDE: How to Manage the Risk in Your Decision Making and Winning Conversations: How to turn red tape into blue ribbon. He is the designer of the Risk Culture: Build Your Tribe of Advocates Program for support functions and the Persuasive Adviser Program for internal advisers. Both can be booked individually or in-house. For more information about Bryan, please click here.