Roads to ruin: a study of major risk events. (2012)

“The authors investigated 18 high profile corporate crises of the last decade and analysed the failures that gave rise to each. Seven key issues emerged.”

Professors Derek Atkins, Chris Parsons and Alan Punter, all of Cass Business School:
Anthony Fitzsimmons, Chairman of Reputability
Sponsored by Crawford and Lockton, prepared by Cass Business School on behalf of Airmic.

The authors investigated 18 high profile corporate crises of the last decade and analysed the failures that gave rise to each. Seven key issues emerged:

A. Inadequate board skills and inability of non-executive director (NED) members to exercise control

B. Blindness to inherent risks, such as risks to the business model or reputation

C. Inadequate leadership on ethos and culture

D. Defective internal communication and information flow

E. Organisational complexity and change

F. Inappropriate incentives, both implicit and explicit

G. ‘Glass ceiling’ effects preventing risk managers from addressing risks emanating from top echelons.

The authors’ key conclusions are:

1. Current risk management techniques are not designed to find or deal with these dangerous underlying risks and the engagement with risk professionals needs to be enhanced

2. Boards, particularly chairmen and NEDs, have a large, important blind spot – their leadership is essential if these dangerous risks are to be identified and managed.

Read a preview here: Roads to ruin: a study of major risk events