Our Insights

February 2015

Have You Considered Your Portfolio’s Enterprise Risk?

Ann Bennett Spence and Christopher Parker

The portfolio’s enterprise risk is the potential effect of portfolio volatility on the bottom line of your organization. For a given institution, the risk may be lower than Trustees think it is—or it may be higher. How does one measure this risk? How should it be dealt with when constructing a long-term investment portfolio? What can be done to avoid poor returns caused by inadequate enterprise analysis? We suggest the use of the portfolio/enterprise risk tool.