An Animal Kingdom of Disruptive Risks
One of the most important responsibilities directors have in their roles is to implement best practices and policies that reduce or mitigate enterprise risk. More specifically, directors are challenged to predict risk and have a proactive plan in place for risks in a VUCA (volatile, uncertain, complex, and ambiguous) business environment.
Given the multitude of risks companies can face, how should directors categorize and organize disruptive risks and their traits?
In An Animal Kingdom of Disruptive Risks, the cover story from the latest edition of NACD Directorship magazine, James C. Lam, risk chair of E*TRADE Financial Corp. and director of RiskLens™, provides an essential framework of definitions and analysis directors can use to explain the characteristics of and the impetus behind particular disruptive risks. In this article, Lam addresses the following questions:
- What are black swans, gray rhinos, and white elephants?
- Why are they so complex and difficult to deal with?
- How should directors incorporate oversight of these disruptive risks into their overall risk-oversight strategy?
- What questions should directors ask their board to ensure preparedness?
Download this article for expert risk-management advice from a world-renowned risk expert—so that your board is ready when faced with the challenges of disruptive risk.
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