The number of risks a business faces on a daily basis is nearly endless, with problems ranging from minor hang-ups to devastating disasters. Preparation for these hurdles is critical, but even the most experienced CFO or financial professional may still find risk management to be challenging.
Whether organizations formally address risk through an internal committee, an external auditing service or if risk management is embedded in a company’s culture, what is important is that risk is not ignored entirely. Many companies also emphasize communication throughout the risk mitigation process, as stakeholders are regularly kept in the loop about risk processes.
Writing for Harvard Business Review, three authors advocate business decision makers accepting that harmful incidents will occur and planning accordingly for the consequences. These low-probability, high-impact events are generally very difficult, if not impossible to predict, making any attempt to do so mostly futile.
“Risk management, we believe, should be about lessening the impact of what we don’t understand – not a futile attempt to develop sophisticated techniques and stories that perpetuate our illusions of being able to understand and predict the social and economic environment,” Nassim Taleb, Daniel Goldstein and Mark Spitznagel wrote in October 2009.
Executive teams, particularly CFOs and other financial professionals, need to be well-versed in risk management and long-term planning strategies, as a lack of foresight among members of the finance team can set a company back substantially.
To fill finance and CFO jobs with these strategic thinkers, business should rely on financial recruitment firms that have accessed to experienced industry professionals. A financial professional search accelerates this process and provides business makers with an expanded pool of qualified candidates that they can choose from when making a final hiring decision.