Risk is a fact of life. Leaders in every sector – not just business – take risks to create value for their organisations. They also take steps to mitigate and manage risk. Recent high-profile business meltdowns, charities caught up in Icelandic bank collapses and tragic failures in governmental agencies suggest that many organisations don’t fully understand the risks they are taking or manage them well. What lessons have been learnt from efforts to see around the corner?

First, the shortest route to failure is a straight-line extrapolation, an extension of the patterns of the past into the future. The best board leaders are keenly aware of this and bemoan management’s narrow view of risk and opportunity. They worry that management is too reliant on the past for its analysis of what could go wrong in the future.