This is the risk that the firm or organization is impacted or suffers loss due to the inability of the executive management team to execute the strategy or business plan. This may be due to one or more of the following:

  • Insufficient skills, expertise or resources within the management team;
  • The management team being distracted or preoccupied by issues, problems, projects or other initiatives.
  • The management team executing and implementing a different strategy or business plan to that approved by the Board or shareholder(s);

Whilst not strictly a risk under Management Risk there is also the possibility that the strategy or business plan may not be capable of execution (and the Board or management team may not be able to identify this and seek revision). This risk is included for the benefit of investors or creditors using the framework.