52 Risks® Update (February 2021): World Economic Forum Global Risks 2021 Report, 21 Ideas to Re-energize Risk Management in 2021, GameStop’s 34 Risks and more.

Global Risks 2021 Report

What do you get when you bring together the combined business and risk expertise of 841 business, academic and policy leaders to review the 35 most pressing risks facing the world? You get the World Economic Forum’s landmark Global Risks Report. It is essential reading for all business leaders. This year’s edition, the 16th, can be read in its entirety here.

The report has a number of good charts and infographics that show the change in global risks since 2012. It is interesting to note that many of the risks businesses and communities face in 2021 have regularly featured over this period.

The key actions for directors, executives and risk managers are to take steps to understand what the implications are, the scenarios that may unfold, and the risks and opportunities for a business from the risks in the Global Risks Report.

For an overview of how to get started with scenario planning and downside stress testing, also have a look at the article ‘Managing Financial Risk: The Role of Stress Testing and Downside Scenario Analysis’ on the 52 Risks® website here. Extreme Weather Events and Climate Change are well suited to this analysis.

21 Ideas to Re-energize Risk Management in in 2021

Last month, I published a list of 21 ways in which business leaders and risk managers can re-energize risk management in any business, using the 52 Risks® framework. Simple, practical ways to get the conversations about risk management started.

Click here for the full list. Email the article link and ideas around to your fellow directors, executives, and work colleagues. It is never too late to start raising awareness of the importance of risk management.

GameStop’s 34 Risks

After the storming of the US Capitol on January 6th and President Biden’s inauguration later in January, the next most important event that happened last month – or perhaps the most important for any Reddit Walllstreetbets’ chat forum member and Robinhood trader – was the GameStop buying frenzy and related equity market turmoil.

The short squeeze and subsequent trading machinations are well outside the scope of the 52 Risks® newsletter. However, it is worth having a look at the business of the actual company, GameStop. GameStop’s 2019 annual report (you can find it here) has a particularly good section on its business risks (it starts on Page5 of the annual report). There are 34 Risk Factors listed and they summarize GameStop’s business risks very well.

Even if your business does not need to publicly disclose its risks, it is worth periodically documenting the key business risks in this manner for shareholders, board and management.

 

Peter Deans