October 2010

In tough financial climates, risk management is perhaps more crucial than ever. In this article we suggest a few areas that may improve the integration of your current strategy.

Keep it up to date

Most organisations have a risk policy and a strategy outlining the process for completing risk assessments. However, in the real world it is easy to let other tasks take priority. Try and implement systems that remind risk owners to review their risks and control measures to avoid things being overlooked. It is often a good idea to promote a standard such as review high risks every 1-3 months, medium risks every 3-6 months and low risks every 6-12 months and then adapt as necessary.

Keep it simple

Risk Management is integral to success and you need to ensure all personnel are involved and have bought into their part of the process. So....don't over complicate the risk assessment procedure. If your employees find it difficult or time consuming to manage, then they are probably less likely to do it. This is still truer during tough economic downturns where reduced staffing levels result in people taking on more responsibility.

Make it flexible

The way risk management is approached within your organisation will inevitably evolve over time. Changes will occur through advances in risk management thinking as well as changes to personnel, business strategy etc. It is important that your framework is sufficiently robust and well embedded that it can accept and accommodate for change. When investing in risk management sofware, don't just tick off what  you need today, keep an eye on tomorrow and be sure to check that the system can cope with the addition of new users, extra risks and future customisations or features.

Relate risks to other business objectives

Risk Management should not be an isolated process. It is important to acknowledge how risks may effect the corporation's goals, pojects, strategies and organisational departments. By doing this you can easily see what is hindering (high risks) or what opportunities (low risks) are available for that goal, project, strategy or department. This will help your organisation allocate resources effectively. It is sometimes the case that risks could be related to multiple areas and in this situation, good risk management practice is to relate the risk to the area it will most greatly effect and record the others as additional notes.

Finally, get everyone involved

Risk management should be a practice that everyone is involved in. Departmental managers should be responsible for their own risks and have easy access to update, monitor and control them. Other employees may be assigned risks or be responsible for reviewing. It is also worth considering the employees within your organisation that would benefit from view only access.

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