Seven reasons why companies fail

This the conclusion of new report by Cass Business School, part of City University London, undertaken on behalf of the risk management association Airmic. The report looked at 23 large companies, all of which suffered potentially life threatening corporate crises. It identified seven key factors at the root of their demise:

1. Inadequate board skills and inability of non executive directors to exercise control 
2. Blindness to inherent risks, such as risks to the business model or reputation 
3. Inadequate leadership on ethos and culture 
4. Defective internal communication and information flow 
5. Organisational complexity and change 
6. Inappropriate incentives, both implicit and explicit 
7. ‘Glass Ceiling’ effects that prevent risk managers from addressing risks emanating from top echelons.

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