Deal with risk strategically or lose shareholder value, firms warned.

Position:Protecting assets and improving shareholder value - Brief article
 
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The chairman of IFAC's professional accountants in business committee has urged boards to move risk management higher up their agendas.

Bill Connell FCMA told an audience of 150 senior business professionals and academics at CIMA's distinguished practitioner lecture that enterprise risk management was crucial for protecting assets and improving shareholder value.

"When you start looking at risk, you must decide whether you're going to worry about the regulation requirements or whether you're going to try to enhance shareholder value," said Connell, a former director of risk management at the BOC Group. "As a management accountant, I was far more interested in shareholder value, as it's forward-looking."

Connell, who is also a CIMA council member, pointed out that 100 of the Fortune 1,000 had lost a quarter of their shareholder value in the space of one month. Of these companies, 60 had attributed the decline to strategic risk issues.

He explained how BOC had started looking seriously at strategic risk only when the business had nearly been taken over and split up. "It's critical that risk management is embedded into the...

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