The risk profession is a large one as it encompasses professionals in a variety of management disciplines. The risk-related sector generates billions of dollars every day in revenue around the world. This new model is proposing that risk professionals adjust the way they perceive, model and evaluate risk. The implications of the model are therefore potentially far-reaching.

Implications for risk theory

The new model provides a new context for risk theory. Theories and models of everything from probabilistic formulae to credit risk calculations should take into account the 13 precepts of risk. The new model of risk has implications for risk theory across all four schools of thought. Any new contributions in respect of one aspect of risk will in future have implications for other schools of risk through this common model.

Our discussions here have also highlighted the fact that the existing body of risk theory is incomplete. This in itself is nothing new, but new discoveries in the fields of chaos theory and complexity theory, for example, reveal shortcomings in the conventional models of risk management. These two theories also disclose additional dimensions of risk that require further research and theoretical explanation.

The new model implies that further research needs to be done on the way in which risk's 13 precepts interact. It highlights elements of the risk dynamic hitherto understated. For example, the effect of risk-positioning on risk-taking requires further investigation, as does the effect of value on risk-taking.

The discussions suggest that each of the four schools of risk should broaden its approach to risk management. The new model also implies that each school should adjust its processes of risk management so that they reflect the true and complete risk dynamic. In this way enterprise-wide risk management would truly develop.

Implications for risk management integration

At the heart of the new model is the desire to integrate the different risk management processes, and these proposals suggest that the new model of risk provides the necessary foundation for the integration process. In the first instance, integration should happen at the theoretical level where the various risk practitioners should participate in building a common foundation of risk theory.