Assessing Risk: A Strategic Perspective
Key Risk Assessment Best Practices
Board Perspectives: Risk Oversight, Issue 30
Assess strategic risk more effectively by identifying the critical assumptions that support the organization’s strategy and developing contrarian statements to test whether those assumptions remain valid. Evaluate both plausible and less likely scenarios based on impact, persistence, velocity and response readiness to focus attention on the risks that could create the greatest disruption. Then, translate high-impact scenarios into key risk indicators, trending metrics, competitive intelligence priorities, and response plans that provide early warning and support stronger preparedness. This approach helps management and boards constructively challenge assumptions, recognize emerging conditions and strengthen strategic decision making.
Key Takeaways:
- Define and challenge the critical assumptions underlying the organization’s strategy.
- Use contrarian statements to identify conditions that could invalidate strategic assumptions.
- Evaluate high-impact scenarios based on impact, persistence, velocity and response readiness.
- Establish early warning indicators and response plans for significant strategic risks.