Is Your C-Suite Risk Literate?

Jason Bergner, Joshua J. Filzen

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Managing risk effectively is essential for business success, and thus understanding risk is vital for business executives. Effective risk management increases firm value, whereas poor risk management will damage shareholder wealth. In this article, we examine the risk literacy of business executives and find significant variation among the leaders we sample. Our findings suggest that business executives would be well served to evaluate their own risk literacy, and remediate, if necessary; to work to increase risk literacy in the company’s employees; and to include risk literacy as an important and routine part of the firm’s overall culture. Because the importance of risk literacy increases with business complexity, we believe that risk literacy will only become more important in the future.

Original languageAmerican English
Pages (from-to)591-601
Number of pages11
JournalBusiness Horizons
Volume65
Issue number5
DOIs
StatePublished - Sep 2022

Keywords

  • Berlin Numeracy Test
  • Decision-making
  • Risk literacy
  • Risk management
  • Statistical numeracy

EGS Disciplines

  • Accounting

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