Writing Assignment on Wall Street Journal Article: “Anticipating Corporate Crises”
1. In today’s financial markets, the crisis has been blamed on insufficient or even poor regulation to effectively watch excessive risk taking in the financial system. On the other hand, many others have given some of the fault to the lack of well-prepared board of directors, who “fail to ask enough tough questions or adequately scrutinize management” and to assess vulnerability of corporate risk (Lublin and Tuna, WSJ). Possible regulations/rules that may help corporate boards get prepared for crises should include ensuring that the board has the right mix of competencies and skills for the major and most familiar kinds of corporate crises, directors can help see that their companies get through hard times with as little damage to the company and the stockholders as possible and, in many cases, avoid a crisis altogether. Another rule that may help is ensuring that the company engages in responsible investment as a tool to use by the board and investors to influence corporate governance as an effort to restore the trust and integrity of the organization. Since there is a need for board members to be better prepared, engaging them in risk management will bring better results.
2. When I am assessing risk in my life I try to the best of my ability to answer the following questions: What could go wrong? How could I fail? What must go right for me to succeed? Where am I vulnerable? What do I need to protect? Which decisions require the most judgment? After risks have been identified, I try to come up with ideas to assess the likelihood of the risk occurring. I also try to estimate the potential impact if the risk were to occur. And finally, I determine how the risk should be manag ...