 ACCELERATE VALUE |
||||
|
|
Risk: reducing passive risk to improve returns on capital The business community seems to be rediscovering what we’ve always known: the fundamental objective of any economic activity is to maximize return on risk, not just return. The ability to measure the return on risk of the lines of business may produce a more insightful view of performance than measuring returns only. There are risks that management is well-placed to control (e.g., operational risks) and some risks that are more difficult for management to control (e.g., raw material prices or pension fund liabilities). Knowing which is which – and acting accordingly – ensures that internal resources (especially management time) are always focused on activities which accelerate value. We help companies identify sources of trapped capital using a tool called the Risk Balance Sheet, developed by Nobel Laureate Bob Merton. We then work with clients to devise strategies for liberating that trapped capital and reallocating it to value creating activities such as innovation, improved customer experiences and brand building.
To learn more, contact Peter Hancock at +1 212 377 5187 or phancock @trinsum.com
|
|||
|
|
|
|
||