While most of the killer risks that can torpedo a company exist within the walls of the organization, the deadliest—in terms of its hidden impact—relates to external communications, a risk expert said recently.

Executive Summary

While most of the killer risks that can torpedo a company exist within the walls of the organization, the deadliest—in terms of its hidden impact—relates to external communications, according to Sim Segal, president of SimErgy Consulting, who says that the failure to properly disclose risks to shareholders is the single most overlooked risk in all sectors. This article is the second of two based on a recent presentation by Segal reviewing eight killer risks. Carrier Management published a related article, Talent Risk: A Killer Torpedo, on Jan. 2, 2014.

In particular, Sim Segal, president of SimErgy Consulting, said he believes that the failure to properly disclose risks to shareholders is the single most overlooked risk in all sectors.

Segal, an expert in enterprise risk management and author of the book “Corporate Value of Enterprise Risk Management: The Next Step in Business Management,” identified eight overlooked risks that can tank a company during a presentation to the Casualty Actuaries of Greater New York (CAGNY) late last year.

(See related textbox, “Killer Risks,” below for the complete list, which includes external communications.)

During a session titled “Killer Risks: Torpedoes in the Water,” Segal, who is an adjunct professor at Columbia University teaching a course on ERM, also shared the results of a mini-research study related to disclosure risk—revealing two types of disclosure problems apparent in a dozen public company filings, including three property/casualty insurers.

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