Since the dawn of commerce, successful businesses have allocated plenty of resources and top quality management time to developing new products and to making and marketing existing products more efficiently. The effect on profits and thus on shareholder value has usually been positive and, where a current stream of business was involved, has soon manifested itself. To a large extent the same is true of managing financial risk. The hedging of currency risk by international traders, for example, is a well-established and integrated part of the management process.
Until relatively recently, however, businesses have been slow to apply similar rigour to other classes of risk. Money spent defining and limiting risk, if spent effectively, will yield results that are very difficult to measure in financial terms. Budgets for this type of expenditure are therefore hard won and easily lost and it is not surprising that good managers will question how time spent on risk management will further their career.