According to a CFO mag article on a soon to be published survey of CFOs on their risk management practices, the top four risk management priorities for CFOs are:
1 – Avoid a large loss
2 – Fulfill shareholder expectations
3 – Increase expected future cash flows
4 – Increase the firm’s value
Notice that three of the four are future-oriented, upside potential for risk management, and CFOs are seeing risk management as a profit center.
CIOs and IT risk managers when communicating to the CFO, who is often also the CRO or has the CRO as a direct report, should put risks into the context of one or more of these four CFO risk management priorities – they must explain IT risks in terms of business performance.
According to the survey, while financial hedging strategies are not uncommon, most CFOs rely instead upon operational strategies to hedge market and credit risks. That is a wide open door for the CIO and IT CRO to provide solutions to support operational risk management – to make a difference.
1 – Communicate IT risks in context of the CFO’s risk priorities
2 – Look for IT solutions to support the CFO’s operational strategies to manage risks
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