Develop a Way to Demonstrate the Potential Financial Impact of a Risk

 

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Organizations have long been using risk management tools to help executives come to consensus on the fastest-moving, highest-impact risks that could disrupt a company's strategy or current operating model. What's more difficult is quantifying and forecasting the potential two- or three-year financial impact associated with a significant business risk.

In this article, derived from APQC's best practice report, Enterprise Risk Management: Seven Imperatives for Process Excellence, the LEGO Group (a featured best-practice organization) reveals how it attempts to clarify how much shareholder value could be at stake along a multi-year forecast horizon if a major risk materialized.

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