Monday, October 20, 2014

How do you overcome Risk Assessment challenges?

From risk mitigation to risk management to risk intelligence.

Digitalization brings both abundance of business opportunities and the flood of high potential risks, how to manage them effectively become more critical than ever. First and foremost, how do you overcome risk assessment challenges?

1) Sponsorship from business leaders, who would encourage their teams to participate with positive commitment.  It is very difficult to convince senior management to act upon preventative measures, unless you are able to put it into monetary terms.
2) Attitude and experience of the risk manager to ask question; and do the pre-work before risk assessment in the correct manner. Team and leadership "buy-in" is extremely important for any risk strategy to get off the ground and to maintain effectiveness and efficiency
3) Developing forward looking assessment framework, that is able to identify risks and report to the board in a manner that brings about the right conversation about risk management among the board members.
4) Making the exercise comprehensive yet simple at the same time; to ensure it is not taken as a burden by employees responsible for it and truly adds value to the organization. You also have to be prepared for a management / employee commitment and understanding which may include overlapping risk related responsibilities or communication with the entire senior management team for organizational critical elements, rather than just the leader responsible for the asset, event, or process.
5) Developing an effective risk culture within the organization, which would lead to effective implementation and embedding of risk initiatives at lowest levels. The effective risk culture in the organization is the primary key to resolving and preventing many of the challenges.
6) Integrating risk into resource prioritization and planning processes. The risk process helps them prioritize the activities they are committed to resourcing in addition to serving as a cross check for anything that they may have missed or are doubling up on.
7) Avoid pitfalls: ENTERPRISE-WIDE RISK MANAGEMENT OR ENTERPRISE-WIDE LIST MANAGEMENT. Enterprise wide risk management intends to manage enterprise risk systematically and effectively; but enterprise wide list management is the scenario in most organization they list the risk but do nothing about it and they say they have implemented ERM without regular review of changes in profiles or be able to capture incidents that changes rankings.
8) Other enablers to meaningful risk information include appropriate aggregation processes for the executive as well as an appropriately calibrated risk scheme that is gaming-proof.
Assessing and managing risk effectively is an important step in improving organizational maturity and achieve high-performance business result, most of businesses are not perfect but they are inching their way to full agility. 


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Trades Insurance Australia

This article is very helpful and interesting to read. Thank you for sharing!

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