Risk Assessment: Expect the Best, Plan for the Worst

July 15th, 2011 | By

Organizations face risk on multiple levels and from an enormous range of factors. And being seen as a “high-risk” company certainly impacts valuation. Of the many concerns for risk managers today, two of the biggest are global economic uncertainty and information technology.

For boards concerned with how different economic forces will impact the corporations they oversee, today’s environment provides plenty of challenges and opportunities. Last month, the Wall Street Journal reported that as the Federal Reserve’s latest economic stimulus initiative (QE2) comes to a close, investors are keeping a close eye on their portfolios and shying away from riskier assets. According to a recent Bloomberg article, after his recent meeting with German Chancellor Angela Merkel, President Obama made it clear that U.S. economic growth is still at risk from the precarious economic situation in Europe.

Cyber attacks that lead to data theft threaten not only the valuable information a company might possess, but the trust and confidence of its investors as well. Just ask Sony, Epsilon and RSA Securities, who all recently suffered data breaches.

In a letter to Senate Commerce Committee Chairman Jay Rockefeller (D-WV), the Securities and Exchange Commission (SEC) recently stated that publicly traded companies should disclose the threats and potential impacts of cyber attacks. The SEC guidance came in response to a letter sent by Senator Rockefeller, who noted that “it is essential that corporate leaders know their responsibility for managing and disclosing security risk.”

Because of these new oversight and risk management demands and higher stakes for corporate boards, NACD is offering two separate sessions discussing risk assessment and management at this year’s NACD Board Leadership Conference in Washington, DC from October 2-4.

The Reshaping the Risk Agenda session features expert speakers who will explore possible blind spots in risk assessment and the implementation of early warning systems, as well as the importance of scenario planning. A major focus of the panel’s discussion will be the board’s role in overseeing risk versus avoiding risk in the current economic environment.”

This year’s conference also offers a Risk Board Committee Forum where professionals from the leading global management consulting firm Oliver Wyman will discuss methods for improving oversight processes and examine the links between strategy and risk. A special focus of this forum discussion will include the board’s role in overseeing IT risk.

NACD understands that the best way to mitigate risk is through education and learning from people who have already been on the front lines battling these issues—and winning. That is why we want you to be there to share your experience and hear from your peers.

To register for the NACD Board Leadership Conference, go to nacdonline.org/conference. Early-bird discounts are in effect until July 31.  Additionally, for directors and executives from NASDAQ-listed companies to save 10 percent on registration prices, please enter coupon code OMXSAVE. To register or ask questions in person, please email registration@NACDonline.org  or call 202-572-2088.

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One Response to “Risk Assessment: Expect the Best, Plan for the Worst”

  1. Ben king says:

    I agree education and sharing information is the number one way to proper risk management. Some organizations would rather hide an attack the share it because of financial responsibilities. There will always be something new and we need to work together.

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