Organisational aspects of risk management

In the last of this four-part series, David Rowe looks at organisational issues and argues the chief executive and board must accept responsibility for strategic risk management decisions

One of my earliest columns for Risk pointed to a fundamental conundrum of corporate life: a firm cannot succeed without proper risk controls, but a totally risk-averse company will fail. It is not risk as such that threatens the long-term success of an institution – only excessive and uncontrolled or insufficient risks present such a threat (see footnote 1).

Most of us have seen how difficult it is to maintain the right balance in a large company. The central problem is the separation of