Strategic risks can expose an organization to loss and even extinction when unrecognized or unmanaged.

Think of the many well-known companies that have ceased to exist due to a failure to recognize the risks coming from new technology, changing customer preferences, heightened competition, new regulatory burdens or socio-economic volatility.

It has always been the responsibility of the board, CEO and senior leadership team to develop, approve and execute the strategy to analyze the risks involved in the direction they have chosen to take.

Generally, however, none of the individuals in these roles are trained in discerning risks and some are not inclined to. They are more focused on preserving the status quo, if it is currently positive, or on chasing new opportunities while discounting the risks.

The chief risk officer is keenly aware of marketplace risks and knowledgeable about risk management, but if he or she not involved in strategy setting or strategic discussions in their companies, such insight is likely missing when strategic decisions are being made.