1 minute read
5 Conclusions
culture and balance sheets. Management related issues such as board structure, CEO promience and management exeuctive of key strategic goals are also risks to consider as they have the ability to limit growth for a company. Product failure is a key risk that features in several risk registers.
5 Conclusions
A taxonomy of business risks has been proposed to assess the threat of events that have the potential to cause significant losses to corporate balanace sheets.
5.1 Knowing your Threats We argue that the development of an extensive list of potential causes of future catastrophic disruption is more useful than assuming that these risks are unknowable or that they cannot be prepared for. The Cambridge Taxonomy of Business Risks version 2.0 provides at least a check-list of potential causes of principal and emerging risks.
5.2 An Educative Check List This list demonstrates that there is a wide range of potential causes of business disruption and loss. It may be that the most useful application of the taxonomy is to provide illustrative information for risk managers to recognize that the risk landscape is more extensive than they might otherwise assume from their own experience. It may improve risk perception in the risk management community.
5.3 Terminology The field of emerging risk identification is relatively young, and there is a wide variety of terminology in use, which we argue needs standardization and agreement around common usage. Thus we have proposed the following definition for emerging risks a new risk, changing risk, or novel combination of risks for which the broad impacts, likelihoods and costs are not yet well understood.68
5.4 Developing a Toolkit To use this effectively the risks identified in the taxonomy have to be translated into effective tools for managers to assess their exposure to them. The Cambridge Business Risk Hub is an approach to compiling content around these risks for use by risk management community.
68 This version is adapted following feedback from the definition we originally proposed in the following blog (Copic 2019)
