Financial collapse and other events have highlighted the need for corporate financial risk management and have exposed weaknesses in organisational attitude to risk and risk control procedures. In today’s business world, managing risks both internally and externally remains one of the greatest challenges facing both public and private organisations and their management teams.

While some organisations have strategic and operational risk strategies in place, many organisations leave the management of risk to individual managers or manage risk on an ad hoc basis or reactively when the risk is exposed. Effective management of risk requires much more attention and focus than many managers are aware of and it is vitally important that organisational wide policies are normal regarding risk and the development of a risk awareness culture as there are organisational benefits that can be made from successfully managing risk.

 

 

Focus on risk allows identification, assessment and planning to remove or reduce the risk and to gather information to determine the level of risk facing the organisation, this will allow senior managers to determine whether the identified risks are positive or negative, that is opportunities or threats. Being aware of possible risks can mean that previous unaware of negative risks or threats can be planned for and turned into positive risks or opportunities.

 

Focus on risk will help a consistent approach to risk to be developed throughout the organisation.

 

The definition of risk is ‘an uncertain event or set of events which should it occur will have an effect on the achievement of the organisational mission, goals or objectives'. As explained above these effects can be both opportunities or threats and an organisation that chooses to manage risks can develop competitive advantage.

 

Risk is such an important function of the organisation that it should be actively managed and not be an organisation managed by risk through necessary unplanned reactions to it.

 

 

 

 

 

1. Develop and implement a management framework for the management of risk.

 

2. Identify the roles of managers and others who manage risk and establish responsibilities.

 

3. Identify and assess the risks to which the organisation is exposed.

 

4. Determine the highest possible magnitude of the risk effect on the organisation should the event occur. How will performance be affected negatively or positively.

 

5. Having identified the risk what controls are required to eliminate or reduce the risk or to ensure a positive outcome.

 

6. Records should be established for the recording of risk or any other issues  or incidents that may become risks. A system of review should be established.

 

7. A system of internal risk auditing should be established to identify any development in strategic and operational risk control deficiencies and to highlight the adequacies and deficiencies of risk controls.

 

 

IDF Business Consultants are availablle to facilitate organisational risk workshops, from £795 per day up to 8 delegates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

back to:          Home