ABSTRACT
Strategic risk deserves special mention because of its criticality for the successful governance of an organisation. Arguably strategic risk management has never been more challenging because the environment exhibits turbulence, uncertainty, novelty and ambiguity, or ‘TUNA’ conditions. This chapter describes the principles of strategic risk management, with further discussion of strategic risks in Chapter 14 (climate risk), Chapter 15 (cyber risk) and Chapter 16 (COVID-19 pandemic).
A feature of this chapter is a discussion of forecasting and the conditions under which forecasting works best. Given the extraordinary difficulty of accurately forecasting future market conditions, the chapter describes how scenario analysis is used in strategic risk management. It also highlights the benefits of flexibility and preparedness for treating strategic risk in TUNA conditions.
