Including risk in the balanced scorecard: Adoption rate and implementation methods of Johannesburg Stock Exchange listed organisations

Abstract

It has been suggested in previous research that it might be worthwhile to include risk measures in the  balanced scorecard (BSC) or to rework it in order to manage risk. The literature review in this study indicated that some conceptual and case study research has been done to investigate how an organisation could go about accomplishing this. A number of researchers noted that including risk measures on the face of the scorecard might lead to a problem of over-complexity. Using content analysis as the method of inquiry, this study explored how organisations are currently adding risk to their scorecards. The key fi nding of the study was that organisations that have reported adding risk measures to their BSCs are predominantly adding risk measures to the face of their scorecards. This finding is interesting because it would indicate that the previously reported and conceptualised problem of complexity does not seem to have such a great impact as previously thought.

Key words: balanced scorecard, risk management, enterprise risk management, performance management, risk scorecard, risk perspective