Your Course of Study
In Risk Management for Corporate Leaders, you will learn how public and private organizations are using cutting-edge methodologies to drive and to preserve enterprise value. As you work through a rich learning experience that blends faculty lectures, case studies, group discussions, scenario planning, and war-gaming exercises, you will expand your capacity to connect strategy formulation to risk management.
The curriculum focuses on five key areas:
Recognizing and avoiding the risks from unexpected and undesirable employee behavior
- Understanding how compliance failures lead to adverse consequences from bribery, fraudulent financial reporting, and other illegal and unethical behavior
- Examining the roles of codes of conduct, internal controls, and boundary systems
- Establishing the functions of internal controls and internal audits
Integrating risk management into strategy formulation and strategy execution processes
- Using strategy maps to identify the risks inherent to your strategy
- Identifying the key risk events that could derail your strategic objectives
- Developing a personal Key Risk Indicator scorecard
- Implementing risk mitigation initiatives to reduce the likelihood and consequences of risk events
- Selecting strategies that are adaptable and robust for multiple states of the world
Managing the risks from external, noncontrollable events
- Identifying risks that the enterprise should insure or hedge against
- Selecting the risks that the firm has a comparative advantage in retaining
- Recognizing the risks in inter-connected complex systems
- Using scenario analysis and war-gaming to anticipate and plan for risks that arise externally
Responding to reputational and brand risks
- Dealing with unexpected, unfavorable feedback and data about the company's operations, products, and services
Organizing, managing, and governing the risk management function
- Deploying management tools and processes to identify, measure, mitigate, and manage the three levels of risk exposure:
- Level 1: Routine operational and compliance risks—the "known and avoidable"
- Level 2: Risks inherent to the strategy—the "known unknowns"
- Level 3: Unexpected risks that arise externally—the "unknown unknowns"
- Deciding on the appropriate role for your enterprise's risk management function—information facilitator or decision-maker
- Using risk (heat) maps to obtain quantitative estimates of the likelihood and consequences of risk events
- Setting priorities and establishing funding for risk mitigation initiatives
Maintaining the creative tension between high innovation and risk management
- Anticipating what can go wrong with a strategy of high innovation
- Maintaining a healthy balance between the rewards from venturing into innovative new products and services and the risks from unexpected or unintended events
- Recognizing and avoiding how "bad things can happen to innovative strategies"
"The pitch of the course filled a critical gap post global financial crisis. In particular, the scenario-planning session and the courses that had a multimedia dimension had a strong impact. From my personal perspective, it was a wonderful experience—I wish I had done it 10 years ago. Not only have I been raving about the experience, but I am sending the HBS courses link to friends and colleagues as well."
Peter Deans [Director], Alma Grove Consulting Pty Ltd, Australia