Risk and reward: shared perspectives

The challenge for business entities of all kinds is to ensure that the business rewards they seek are supported by sensible management of the risks that confront them. Those who govern entities are responsible for ensuring that they pay due attention to all material risks, including ethical and behavioural risks. This paper contains a number of individual perspectives on these themes.


In 2010 ACCA published Risk and Reward: Tempering the Pursuit of Profit. That paper explores the nature of the dynamics that drive corporate planning and accountability, focusing on the broad range of risks which need to be identified and managed.

One of the areas of risk that warranted particular attention, the paper suggests, is the matter of behavioural risk. It argues that while guidance, standards and supervision undoubtedly have a role to play in regulating corporate activities, those activities are ultimately the result of the behaviour of companies’ lead actors. That paper contends that, whether regulatory standards of various kinds are framed as rules-based or principles-based, what will always be of fundamental importance is the preparedness of companies to apply them honestly, ethically and transparently.

Accordingly, if business is to be conducted in a way which is going to be consistent with the interests of investors and wider society, more attention needs to be paid to how this issue of behavioural risk can be interwoven with regulatory mechanisms so as to ensure, as far as is practicable, that directors and executives act in accordance with the spirit as well as the letter of law and standards.

ACCA is pursuing this agenda in its own activities and on behalf of its members by promoting the concept of ‘public value’. This entails acting not only in the public interest but also in a way which delivers added value to stakeholders through, for example, good corporate governance, enabling access to finance or protecting clients’ wider interests.

In this follow-up paper, we offer a collection of individual perspectives on the issues explored in that earlier study. We look at how investor groups see the significance of risk and pose the question of whether it is feasible to expect commercial businesses to operate in accordance with some conception of the ‘public good’. We also broaden out the scope of the earlier paper by acknowledging that the issue of behavioural risk impacts on the public sector just as it does the private sector. A number of contributions address the application and measurement of ethical principles and consider how those principles might impact on performance.

ACCA thanks all the authors for submitting their work and trusts that it will prove a thought-provoking contribution to the debate.