Reconciling risk as threat and opportunity: the social construction of risk in boardrooms
Ring, Patrick Bryce, Cormac Ashby, Simon
Ring, Patrick
Bryce, Cormac
Ashby, Simon
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2024
Journal
Risk Analysis
Book
Publication Volume
44
Publication Issue
8
Publication Begin page
1959
Publication End page
1976
Publication NUmber of pages
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Abstract
Board directing is a continuous process of risk analysis and control in response to the duality of risk as threat and opportunity. Judgments are made and remade to simultaneously reduce the potential for damaging threats (e.g., fraud, reputation damage), while exploiting opportunities (e.g., new product development, mergers and acquisitions). Adopting an institutional logics approach, we explore this process of risk analysis and control through the varied subject identities (e.g., directorial roles), risk management practices (the procedures and tools used to identify, assess, and control risk), and risk objects (the product of risk identification, assessment, and control, e.g., a risk matrix or register) of boards. We argue that the contingent interaction between these identities, practices, and objects inform the “risk logic” of a board, which may draw attention to the notion of risk as threat, risk as opportunity, or both threat and opportunity. Using the testimony of 30 executive and nonexecutive directors that represent 62 companies from a range of public, private, and third-sector organizations, we contribute to the literature on the microfoundations of risk analysis in organizations by shining a light on how board directors understand, assess, control, and ultimately govern risk in organizations.
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Keywords
Duality of Risk, Risk Management, Board Directing, Governance