Getting it right….
For risk management to be effective the organisation must achieve buy-in, that means everyone:
The Board
The Executive Team
Senior Managers in every department, and
Employees.
The basics….
To be effective, the organisation must ensure that a number of critical practices are recognised:
The Board have established and communicated their agreed risk appetite, leading to a consistent understanding of what matters most in terms of achieving strategic and operational objectives,
The concept of Risk Management is established within the organisation leading to the timely identification, analysis and escalation of risk mitigation at an appropriate level,
Trust and transparency of reporting
Spreadsheet based systems can only achieve this with the commitment of significant administrative effort and routine follow-up of actions regarding mitigation responsibilities and routine reporting to leadership teams, Audit and Risk Committees and the Board.
Whilst organisations have different cultures, structures and demographics, one thing that is certain is that changes to the risk environment are happening, constantly. Whether change reflects political events in the UK, inflation, rises in interest rates, the impact of energy restructuring, instability in Europe or wider market conditions arising from global events, the process of success and even survival must reflect the development of effective risk management as an essential feature of good governance. Only then can the organisation demonstrate full commitment to its stakeholders.
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