Tag: corporate governance

Risk managing the supply chain

The strategic importance of risk managing the supply chain

Risk managers should keep a handle on their supplier relationships as this can lead to significant gains.

The corporate risks posed by a potential supply chain failure are leading more risk managers to keep a close handle on their supplier relationships and they are finding, in some instances, that significant gains can be made in the process.

The latest spate of negative headlines about UK-based corporates that have been found wanting in their governance of suppliers or have suffered operational upheaval owing to a supply chain issue is driving this change.

Source: Strategic Risk

Managing the Unexpected

Assuring High Performance in an Age of Complexity

Book by Karl E. Weick and Kathleen M. Sutcliffe
Review by Michael J. Novak for Office of Research, IRS

“By some estimates, executives and managers spend nearly half their time in activities related to planning: developing an organizational vision; translating that vision into a strategic plan; communicating the plan; deploying the plan via subordinate – e.g., operational, business, financial, human capital, and individual performance – plans, monitoring progress of plans; initiating corrective action when plans go off track; articulating reasons why the plans failed to achieve desired outcomes; and rewarding individuals and teams for their parts in successful execution of the plans.

But why plan? In today’s fast-paced, highly complex transformational environment, it could be argued that planning is obsolete. Because the environment is so chaotic – because the future is therefore so fraught with uncertainty – it is impossible to predict the future. And that is why some organizations have given up on planning: They see it as a waste of precious time that could be used reacting to unpredicted (unpredictable?) events.

That is the impression one might get from a first reading of the book under consideration. Weick and Sutcliffe tell us, among other things, that planning might not only be obsolete; it might be dysfunctional. Picture this: An organization has strategic plans, operational plans, annual business plans, and contingency plans – all expertly crafted, deployed, and executed – yet a series of unexpected events (Murphy’s Law in action) derail the plans and cause disaster. Weick and Sutcliffe argue that the mere fact of such extensive planning tends to detract executives’ and managers’ attention away from those aberrations that fall outside the plans. Organizational leaders may assume that these pesky little anomalies are simply random occurrences when, in fact, they are part of a larger, more insidious pattern coming into play – one that is not recognized until the damage is done.” Read more>

Innovation’s Nine Critical Success Factors

Source: Harvard Business Review
Author: Vijay Govindarajan

Your organization won’t innovate productively unless some underlying factors are in good shape. If “10” is outstanding and “1” is poor, how do you rate your organization on each of these?

1. A compelling case for innovation. Unless people understand why innovation is necessary, it always loses to core business or the performance engine in the battle for resources. The performance engine is bigger, is the center of power, and can justify resources based on short term financial results. So the case for innovation has to be made, and it better be compelling. Read more >

Result Global CEO Survey: Smarter Growth

13th Annual Global CEO Survey: Setting a smarter course for growth

Source: PricewaterhouseCoopers

In the 13th Annual Global CEO Survey we hear how businesses leaders responded to the challenges brought about by the recession, the concerns they are facing today and, reflecting on often difficult ‘lessons learned’, their strategies for positioning their companies for the long-term.

The effects of the downturn were far-reaching. Many business leaders contend they should have anticipated the impact and prepared sooner – allowing them more time to consider various strategic options. As we see in the survey, CEOs continue

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An Unrealized Opportunity for Revenue, Risk Free

Source: ICMA (International City/County Management Association)
by Ron Blanquie

“It’s no wonder that risk management’s public role is often underused and misunderstood. Government entities have incorrectly concluded that risk management’s overall costs can only be tethered but not controlled or reduced.

Public entities in California today face an unprecedented challenge as they try to maintain the levels of public service that their citizens have come to expect. Given the current dismal global economic situation and its adverse trickle-down effect on local government, it’s a wonder that more California communities are not filing for bankruptcy.

Federal bailouts and proposed tax increases seem to be the only revenue-generating mechanisms left—or are they? Maybe an ever-present but unrealized opportunity for local governments exists—risk management!

Public entity risk management has historically been viewed as a necessary evil, an expense line item. Governments have viewed their risk management organization as a triad composed of society, the judicial system, and what the insurance industry has forced on them. This perception is further supported by inexplicable insurance premiums, arbitrary claim settlements, and frivolous lawsuits.” Read more >

Boosting Your Risk I.Q.

Directorship and Deloitte take a look at the importance of identifying risk in all its forms

Source: Bloomberg Businessweek

“A critical issue on the agenda for most directors these days is determining the board’s role in overseeing risk. That was the topic of a recent peer-to-peer discussion hosted by Directorship and Deloitte. A group of leading board directors and industry professionals explored risk-related issues in the aftermath of the economic crisis, which most agree was a catastrophic failure, particularly on the part of finance institutions, to recognize and rein in excessive risk.

“When we talk to senior stakeholders about risk, it’s really about finding a balance across the entire organization. This balance refers to addressing the sensitivities between strategic, operational, and compliance risk, and ensuring the right information and transparency exists,” said Henry Ristuccia, partner and U.S. leader of governance and risk management at Deloitte. Read more >

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