An Australian publication CFO World posted an insightful piece on how CFOs should support and participate in corporate risk assessment processes.
Events like the recent BP oil spill would surely be a wake up call for all CFOs that events perhaps seen as ‘external’ factors can no longer be considered from a do-nothing mindset.
As we have commented several times in the past, technical EHS staff sometimes inadvertently discount events. The technical training and mindset of these folks tends to push them to focus on events with a significant probability. Doing so generally ignores the potential impact of a low-probability event.
CFOs have a strong grounding in risk assessment, analysis. They can influence better risk assessment outcomes.
Teaming with a CFO perspective brings the “impact” element much more to the front of the process, forcing the technical viewpoints to broaden their review and consider matters in a different light. The article also provides a good summary of key points for CFO involvement in a risk assessment process, which can form a solid basis for a model of cooperation in such activities.