Managing risk has long been acknowledged as crucial
to increasing shareholder value but the risk/return
trade-off has not always been well recognised by organizations.
The failure of many high profile financial institutions
has raised widespread concerns about the use of complex
financial products in the relentless pursuit of profit and the
failures of governance and internal control to reduce excessive
risk taking behaviour. Events such as the Deepwater
Horizons oil spill in the Gulf of Mexico not only resulted
in environmental, economic and reputational losses but
also highlight the consequences of poor risk management
practiceswhencost-cutting becomes an organizational priority.