Have you ever wondered what exactly risk management is all about? Well, effective risk management can shield you from unexpected uncertainties and secures your peace of mind.
Risk management is the art of identifying, assessing, and minimising potential risks that could impact individuals, businesses, or organisations. It’s all about being proactive and prepared, rather than being caught off guard!
Whether it’s financial risks, or the risks that will impact you from natural disasters, cyber threats, or even uncertain market conditions. By implementing effective risk management strategies, you can anticipate and address potential threats before they become major setbacks.
For organisations, risk management is essential for ensuring smooth operations, protecting investments, and maintaining a strong reputation. However, risk management isn’t about eliminating every risk, but rather finding the best ways to manage and mitigate the risk or to take a risk when an opportunity arises and is within your risk appetite.
Key identifiers are:
- Good leadership is about ethics and behaviours which supports good risk management.
- Risk management is an enabler and supports – innovation, performance and resilience.
- Risk management is a collaborative arrangement.
- Everyone in the organisation is a “risk manager.”
Risks v. Issues
In simple terms an “issue” is something that is already present and engaged with the objective. While a “risk” is something that may or may not arise to affect the outcome of an objective.
It is probably therefore sound practice to have both an issues log as well as a risk register. That process will help flesh out issues that often sit in risk registers and disguise themselves as risks!
Do you know where you are on the Institute of Internal Auditors Risk Maturity Timeline?
Will this apply to the whole organisation or to a department or service area only? Will risk maturity be different across the organisation?
Looking at the organisation overall. If you have the following:
- Senior management commitment
- Development of Policies and Procedures
- Risk Appetite defined
- Inclusion of risk in decision making
Then you are probably at the midpoint of the five-point timeline – or Risk Defined
For levels four and five on the timeline as an organisation you are well placed to be able to provide assurance on your risk management processes. Level four and five organisations can advance to defining assurance using an assurance map and the three lines of defence which in turn will identify duplication of control and/or areas where assurance is lacking and additional controls should be considered.
How we can help!
Please visit our dedicated Risk Management web page for more information on the services we can offer.
For a discussion or perhaps a health check on your risk management arrangements and maturity please Contact Us.