Issue link: http://www.e-digitaleditions.com/i/57464
Businesses at by Richard Phillips E Risk ven a cursory reading of the business news indicates there's a dearth of high-caliber risk management talent available to the global mar- ket—at a time when there's a pressing need for such talent. The cor- porate world is straining to manage risks presented by a wide array of challenges: the seemingly endless fallout from Enron, the subprime meltdown, the skyrocketing price of oil, supply chain issues in China, widespread natural disasters, and global warming. Many business leaders are starting to realize that they need effective and imaginative risk management to achieve significant competitive advantages, an enhanced corporate reputation, and a better overall stakeholder value. Business schools can help them meet this need—but only if they turn their own programs into true training grounds for risk managers. Today's Risks Attention to risk man- agement has intensified recently because compa- nies worldwide are facing hazards that they didn't even acknowledge five or ten years ago. In the past, even those companies that recognized additional risks largely ignored them, believing that they couldn't be measured or managed. Instead, companies focused on management risks that could be identified in a property/casualty insurance contract: risks posed to employees and vehicle fleets, as well as the potential liabilities faced by C-suite executives and board members. In the early '80s, these manageable risks spread to the treasury department as the capital markets developed so-called derivatives contracts that allowed companies to deal with fluctuating currencies, interest rates, and commodity and equity prices. Companies may have found these financial risks more difficult to understand than risks to their people and property, but—and this is the important point—they still were quantifiable. 44 BizEd SEPTEMBER/OCTOBER 2008 Today's business climate has forced companies to redefine the concept of risk and plan specific ways to manage it. But many business schools aren't turning out the kinds of graduates who can handle this complex job.