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Risk from the CEO and Board Perspective
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Risk from the CEO and Board Perspective

What All Managers Need to Know about Growth in a Turbulent World

Mary Pat McCarthy and Timothy P. Flynn
McGraw-Hill, 2003
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Editorial Rating

8

Qualities

  • Applicable

Recommendation

This is an easily accessible, short and reasonably thorough introduction to the subject of risk. The authors touch on almost every dimension of the topic, including financial risk, operational risk, reputation risk, governance risk and even the risk of terrorist attack. The book might have been quite a bit shorter and somewhat more focused on corporate management if the authors, KPMG vice chairs Mary Pat McCarthy and Timothy P. Flynn had tightened their anecdotes about anti-terrorist preparations at the Olympic Games. However, they seem to have believed that they would lose readers unless they provided a few entertaining distractions, and they could be right. Though it breaks little new ground, it plows the old ground interestingly. getAbstract.com recommends this portable summary of useful information to the CEOs and board members who are its intended audience, as well as to anyone responsible for risk management.

Summary

Changing Risk

These are uncertain and sometimes dangerous times. Companies face many risks. Consider just a few of the risk issues that surfaced during the past two years:

  • Currency exchange rate shifts can alter your company’s competitive picture.
  • Even the rumor of an accounting shenanigan can send a company’s stock price down.
  • Hackers and other software woes can expose firms to massive financial loss.
  • Anthrax spores can arrive in the mail or jets can fly into your building.
  • A cunning lawyer can sue you merely for making and selling a legal product, such as a hamburger or a cup of hot coffee, and win millions of dollars in damages.
  • Activists may target you for boycott because some far off supplier to one of your suppliers uses child labor or pollutes the air or hires a former dictator.
  • Travel restrictions, economic sanctions, meat embargos and other features of the international political and economic landscape can suddenly disrupt the supply chain.

Many of these risks did not exist at all or existed only sporadically a decade ago. As globalization advances, past certainties retreat. The business climate...

About the Authors

Mary Pat McCarthy is U.S. Vice Chair and Global Chair of KPMG’s Information, Communication and Entertainment business. Timothy P. Flynn is Global Managing Partner and Vice Chair of KPMG’s Audit and Risk Advisory Services.

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