In a connected world, disruptions like geopolitical events, natural disasters and supply-chain issues can be devastating for a business. And as sharing information becomes more important, organisations must also limit their exposure to cyber-risk.
With the digital transformation revolution underway, information technology has moved to the heart of enterprise. This shift has increased the need for security, so today’s businesses must embrace a risk-management strategy.
Digital transformation enables more interactions with customers and suppliers, but new connections raise a company’s exposure to risk. While some cyberattacks make headline news, others go undetected. Enterprises that fail to protect themselves may experience:
- Brand embarrassment due to publicised data losses
- Disruption when cyber-breaches affect confidentiality
- A drop in stock price and an increase in operating costs and legal liability
While many boards are aware of risk, they often lack a set of principles to counter the threat. The finance industry uses a three-tier model of independent oversight, enterprise governance, and defining how to address risk.
This structured approach can help ensure operations are clearly defined. Risk then becomes the cornerstone for cyber-resilience and provides transparency for executives and stakeholders.
The board should integrate risk assessment and resilience into the business strategy, define risk tolerance, test plans to address risk, collaborate with stakeholders, and review strategy. Organisations can then create a risk matrix that takes into account legal, operational, financial and reputational considerations.
Today, nearly everything is connected, from vehicles, power stations and factories to fridges, hospital equipment and personal devices. This has made our lives easier but it also increases our risk. So the way we approach risk needs to evolve, which includes the new concept of ‘anti-fragility’.
Anti-fragility relies on manipulating luck to help companies win more than they lose when hit by shocks. Organisations should also consider the financial viewpoint: risk isn’t always a negative feature of business. Companies can choose activities that offer attractive risk/return profiles or yield curves.
Enterprise Risk Management Professional Course | ACCRA & LAGOS | January – March 2018
This is a highly effective and interactive 5 day course for managers, senior managers, directors, executives, financial controllers, senior accounting and finance personnel, and auditors, insurance professionals etc.
For more information on the next course schedule, kindly call our training division directly +233 20 019 6725-7 / +233 303 96 5259 or visit our website www.westliongroup.com