Getting started in risk management or uplifting existing capability can be daunting for any business, irrespective of size or industry. Below are six steps for improving the management of risk:
Use the 52 Risks® Infographic to identify key risks.
If your business is just starting out in risk management, use the 52 Risks® Infographic to start the risk management journey. With all risks on one page, business leaders can use it to identify and then discuss the business risks their organization will face. They are all on one page with 52 Risks®.
Consider implementing an Enterprise Risk Management (ERM) approach to risk management.
ERM is a well-developed methodology for firms to identify, assess and manage risks. ERM is a disciplined and structured approach to risk management that has many efficiency and compliance benefits. In addition, more effective strategic planning, and business decision-making follow, building stronger and more resilient businesses.
Review reporting of risk management issues.
Quite often the discussion of risk issues is left to low-level management forums. Reporting of risk incidents either doesn’t occur or is tucked away in operations and finance reports. Are risk issues reported to the right level within the organization, in sufficient detail ? Also consider if you really understand the risks arising each day in the business. Seek to connect the top and the bottom promptly. With the fast-changing world all businesses operate in, it is critical to have a free flow of information throughout the organization.
Consider investing additional financial resources into risk management.
Are there sufficient numbers and suitably skilled personnel – with sufficient authority – to oversee risk management in the organization? Do you need to invest more in risk management ? Should you appoint a senior risk officer, such as a Chief Risk Officer or Head of Risk Management to get some real traction in the management of risk? A business case is often difficult to demonstrate, as the benefits are frequently ‘losses avoided’.
A board or management offsite can be a fantastic opportunity to set aside time to discuss risk management. The 52 Risks® Mapping Template is one way to document key risks discussed. It can be used to comment on each risk, assign ownership responsibility, and develop action plans.
Access guest speakers on selected risk topics.
Get some external perspectives on risk management and key business risks. For many business leaders, technology-related risks such as IT Risk and Cyber Security Risk are unfamiliar topics. Longer-term structural changes to industries, disruption, or other external forces such as climate change may also call for an external perspective or specialist expertise.
Business leaders have control over how they manage their risks. Whilst many risks are external – and outside of their control – steps can be taken to decide how risk is managed. Start with any of the above.
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