Much like the homeland security chief’s latest “gut feeling” about an increased risk of a terrorist attack in the United States this summer, some risks facing businesses today can be hard to pinpoint and even harder to quantify.
While enterprise risk management attempts to identify and measure the totality of a company’s risks, considerable ambiguity remains about how to assess non-financial, noninsurable risks. What ERM experts agree on is that companies should take a comprehensive view and apply the same approach to all risks, financial or not, such as the risk of production disruptions caused by natural causes or reputational damage due to fraud or ethical lapses.
