The full text of this article
On how to understand and express enterprise risk
by Eyvind Aven, Terje Aven
International Journal of Business Continuity and Risk Management (IJBCRM), Vol. 2, No. 1, 2011
Abstract: In this paper, we address the problem of describing enterprise risk. Several international standards on risk management provide guidelines for this purpose, including the COSO enterprise risk management framework which defines risk as the possibility that an event will occur that adversely affects the achievement of objectives, and the ISO standard on risk management which defines risk as the effect of uncertainty on objectives. However, these perspectives on risk can be challenged, in particular the idea of founding the concept of risk on meeting defined objectives. Our concern is that such a perspective could easily lead to the wrong focus – meeting some more or less arbitrary objectives rather than finding the overall best solutions and measures from a value creation point of view. In the paper we argue that the consequence dimension of risk is better expressed by some impact or severity scales, in line with risk perspectives stating that risk has two main components: 1) the impact of events and consequences (outcomes); 2) the associated uncertainties (probabilities). An example case of a large oil company is used to illustrate the ideas and perspectives.
Online publication date: Wed, 11-May-2011
is only available to individual subscribers or to users at subscribing institutions.
Go to Inderscience Online Journals to access the Full Text of this article.
Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.
Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Business Continuity and Risk Management (IJBCRM):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable).
See our Orders page to subscribe.
If you still need assistance, please email email@example.com