Risk management is important but should be handled and prioritized in such a way that it’s inherent in the way that it doesn't negatively impact business flexibility to deliver premium solutions.
Risk management has strategic dots that need to be connected; it’s important to lift risk management from risk control to risk resilience, and then, to risk intelligence. As financial performance is highly correlated with the level of integration and coordination across risk, control and compliance functions. The efforts on managing risk holistically or in a more integrated fashion are critical for the long term business success.
Organizations must have solid risk management disciplines, make objective risk assessments: It is a crucial step to initiate risk identification in planning processes for managing risks; embed risk identification and assessment in operational processes and multiple management disciplines. The good managers see that risk can provide very exciting opportunities for business growth. Besides identifying risks, they can spot opportunities, and put in place a mandated risk tolerance structure via escalation requirements based on current risk ratings.
There’re a growing number of organizations shifting their risk management orientation from bottom-up to top-down, with more senior management and board involvement. For leading organizations, enterprise risk management is already an integral competency and top priority for C-Suite executives, providing the company a holistic process for connecting the right dots on risk management across the organizations. They push the responsibilities of day-to-day risk ownership out to business managers, who can improve controls around key processes, using analytics to optimize the risk portfolio and improve decision-making coherence.
It is important to identify vulnerability in the control via risk assessment, and determine the potential range of consequences (finance loss, business interruption, reputation damage, etc.): The inevitable range, breadth, depth, and pace of uncontrollable factors acting on any organizations mean identifying business vulnerability is essential to improve business agility, performance, and maturity. Organizations need to have the right dose of risk appetite and high risk intelligence. As long as risks have been identified and agreed with stakeholders as per business needs, you can take information driven risk models that effectively predict, optimize, and consider sustainable approaches with multifaceted perspectives.
In reality, ineffective decision-making, especially at the strategic level will make their business vulnerable to emerging events, or even mislead their business in the wrong direction. The larger the organization and inputs are, the larger the amount of 'rules' are necessary for its functions. If not handled well, organizations are overly rigid, inflexible and become so vulnerable to the dynamic business environment. Thus, enhance a healthy cycle of feedback-feedforward, improve business consciousness, flexibility, and organizational agility.
It's important to harness leadership, enhance information-based decision-making, cultivate an open culture to prevent risks or problems from happening: The organization is not always the one paying for the risk. Stakeholders ranging from investors to customers, to ordinary citizens, to peer companies might all benefit or suffer from the risk attitude of a company. In order to prevent or solve a problem, you have to get an agreement that a problem or risk exists. Preventing problems, managing risks and enabling continuous improvement require the power of information, integrated data-based insight, as well as strong leadership support. It’s about applying quality information to forecast what will happen in the business and how to prevent risk timely.
Preventing problems, managing risks and enabling continuous improvement require the power of information. Instead of risk management being viewed as the role of a few people in risk management, it needs to be viewed as the responsibility of every person in the organization. It’s about the culture thing. Meaningful enterprise risk management is as much about changing organizational culture; all people must support it if they want to create risk management effectively in organizations, and prevent a problem from happening in a timely manner,
Risk management is important but should be handled and prioritized in such a way that it’s inherent in the way that it doesn't negatively impact business flexibility to deliver premium solutions. An effective approach to strategic risk management is to integrate risk identification mechanisms in multiple management disciplines, enhance the detection of future strategic risks and predictions of future performance, improve risk intelligence and business resilience.
Organizations must have solid risk management disciplines, make objective risk assessments: It is a crucial step to initiate risk identification in planning processes for managing risks; embed risk identification and assessment in operational processes and multiple management disciplines. The good managers see that risk can provide very exciting opportunities for business growth. Besides identifying risks, they can spot opportunities, and put in place a mandated risk tolerance structure via escalation requirements based on current risk ratings.
There’re a growing number of organizations shifting their risk management orientation from bottom-up to top-down, with more senior management and board involvement. For leading organizations, enterprise risk management is already an integral competency and top priority for C-Suite executives, providing the company a holistic process for connecting the right dots on risk management across the organizations. They push the responsibilities of day-to-day risk ownership out to business managers, who can improve controls around key processes, using analytics to optimize the risk portfolio and improve decision-making coherence.
In reality, ineffective decision-making, especially at the strategic level will make their business vulnerable to emerging events, or even mislead their business in the wrong direction. The larger the organization and inputs are, the larger the amount of 'rules' are necessary for its functions. If not handled well, organizations are overly rigid, inflexible and become so vulnerable to the dynamic business environment. Thus, enhance a healthy cycle of feedback-feedforward, improve business consciousness, flexibility, and organizational agility.
Risk management is important but should be handled and prioritized in such a way that it’s inherent in the way that it doesn't negatively impact business flexibility to deliver premium solutions. An effective approach to strategic risk management is to integrate risk identification mechanisms in multiple management disciplines, enhance the detection of future strategic risks and predictions of future performance, improve risk intelligence and business resilience.
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