Talking at Cross Purposes About Risk
Richard Steinberg 270004HRBG firstname.lastname@example.org | | 0 Comments | 170 Visits
If you’re involved in developing, enhancing or monitoring your company’s risk management activities, you probably know that “risk” and associated terms are used very differently by different people. This too often is the case throughout an organization, right up to the board level. Indeed, experience shows that senior managements and boards think they’re talking the same language, when they are not.
How often have you heard the terms “risk assessment,” “risk management,” and “enterprise risk management” used almost interchangeably? If your experience is anything like mine, it happens all the time. My sense is that busy executives and directors understand the basic concept of risk and don’t take the time to get into what are perceived to be details in terminology. The resulting problem, however, is that we talk at cross purposes and misunderstandings abound. Risk related professionals know well that a risk assessment is a point-in-time snapshot of risks in an organization, risk management includes a number of activities in identifying, analyzing and managing risk, and enterprise risk management raises the bar to a still higher level.