ERM Advisory

Mismanagement of strategic risks has been shown to be a major cause of loss of shareholder value.

One study by Mercer Management Consulting found that 10 percent of the Fortune 1000 lost 25 percent of their value within a one month period. Another study, by Booz Allen Hamilton, suggested that of 1,200 firms with market capitalisations greater than $1 billion, the primary events triggering the loss of shareholder value were strategic and operational failures.

The evidence is compelling that strategic failure can cause enormous, irreversible and sometimes sudden value loss. Are these losses predictable and avoidable? Can strategy be made more resilient by enterprise risk management? Clearly, many companies do avoid strategic failure and thrive in adverse circumstances.

Proving that enterprise risk management will prevent or mitigate strategic failure may be difficult. But the tools for implementing enterprise risk management are readily available, implementation is not complex and the cost is not high compared to the cost of failure. It is easier to argue that the time has come when enterprise risk management should be a standard management practice.

Together with you Apriori will assess the main strategic, financial and operational risks your company is exposed to. This in order to define the organisation's risk appetite, to put mitigants in place and roll-out a governance structure supported by a well-defined Risk Dashboard for monitoring your KPI and KRI's.