![]() ![]() Many of these examples of strategic risk are inter-connected. The risk is that your operations and business processes are not up to standard. This refers to the broader economic landscape and its potential to affect the success of your business strategy. Risks relating to the financial health of the organization. ![]() The risk brought about by poor governance, risk and compliance processes within your organization. For example, through volatility in a country within your supply chain. The potential for political change, or the political landscape overall, to disrupt your business. The potential causes of this are legion, from regulatory compliance breaches to shareholder activism or poor performance in public ratings, such as those used to measure ESG performance. The risk that your corporate standing is threatened. Distract your business leaders from their operations as their time is abstracted to put in place new governance processes and control measures.Demand new technologies (and therefore linking back to change risk).The digital transformation risk we cited above is a prime example of this ' the inherent risks of introducing any change program. The risk is that you fall behind your competitors as they innovate and improve their offerings faster than you. ![]() What Are the 9 Examples of Strategic Risk?Īmong the types of strategic risk you should have on your radar are: Our list of strategic risk examples below therefore includes more than five. Some sources distill strategic risks into five types, sometimes called the 'five sources of strategic risk.' However, these aren't always consistent, however, look up several different sources, and you will find a variety of risks listed among the 'five types.' Let's look at some of the examples of strategic risks you might face. This evolution of risk has led organizations to try and bring some structure to their mitigation strategies by categorizing and prioritizing the risks they face. At the same time, a spotlight has been thrown on strategic risk via growing awareness of the close ties between risk, compliance and business value. Regulatory and legislative drivers relating to governance, risk and compliance strategies more generally are also prompting businesses to focus on strategic risk. An example of this would be the accelerating digital transformation of businesses, which has delivered many positives but has also exposed new types of risk. They may be 'self-inflicted,' brought about via an organization's own strategy and decision-making. They may be external events like the Covid-19 pandemic are the perfect example here. When we look at strategic risk examples, they are generally defined as those that threaten a business's ability to set and implement its chosen strategy. Strategic risk is a category of risk alongside operational, financial, regulatory and other business risks, it forms part of the umbrella of risks your organization faces. But what does the phrase mean in practice? What types of risk are defined as 'strategic?' How do you identify strategic risks? What are the examples of strategic risks you might face in your organization? What are the types of strategic risk you should prioritize in your risk mitigation strategy? 'Strategic risk' is a term that's often bandied about. Understanding the Different Types of Strategic Risk ![]() Being familiar with different strategic risk examples can help you get ahead of the curve, helping you identify the types of strategic risk your organization faces and the tactics you can put in place to respond. In today's hyper-connected world, the risk evolves faster than businesses can devise strategies to tackle it. Understanding and mitigating risk at a strategic level will be a priority. Whether you are a chief risk officer and strategic risk falls firmly within your orbit, or whether as CFO, CEO or general counsel, you take more holistic responsibility for your organization's risk strategy. Understanding the types of strategic risk you face is fundamental to your ability to tackle them as part of your broader governance, risk and compliance (GRC) strategy. What is meant by strategic risk? Strategic risk examples encompass many different risks ' and depending on the nature of your business, you may face any or all of them. ![]()
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