The concept of risk management

Relatively few British companies have had to withstand earthquakes, floods, building collapse or the kidnapping of top executives; but all are fighting against risks whose effects can be equally devastating. Some of these have been identified and measured. The country's annual accident bill totals a staggering £2.5 billion, employee theft eats up £650 million of industry's assets each year, and fire damage in 1979 amounted to more than £320 million. This figure does not include consequential loss, or loss of exports and production. But there are thousands of other risks faced by industry each day — some so familiar that managers do not even recognise the potential threat they pose. Recognising the need for a comprehensive strategy to deal with them, American industry is rapidly developing risk management as its newest and most powerful managerial discipline.