Effective risk management
- Define a single, internal approach to risk management – stakeholders gather to define: how operational and strategic risks will be identified and categorised, what factors should be considered when analysing and prioritising risks, and how you will allocate, track, and manage risks.
- Introduce a clear process to capture, analyse, present, and track risk information – those involved in each project consider the strategic and operational risks. Risk matrices are then used to analyse raw, current, and residual risks. Risk controls and contingency plans are put into place to monitor and manage risks. Analysing and reporting on risks can be considered with regards to the sources, causes, types, and level of risk.
- Implement a risk scorecard to monitor key risk performance indicators – a risk scorecard collates and displays risk information in one place. It enables you to see at a glance whether your organisation is on track or not, empowers you to deal with any risk issues, and informs decision-making. The scorecard also provides a framework for senior management teams to investigate further into underlying data for business continuity planning purposes or assess risk exposure to the company in financial terms.
- Link your risks to your organisations strategy and projects – having worked through all of the previous steps in the risk management process, it is crucial to link your risks to the organisations strategy and projects to create a golden thread of business information. Every business, large or small, should view risk management as an integral part of their overall strategic business planning.
- Embed a risk aware culture within your organisation – increasing employee understanding of risk management and having a clearly defined process in place enables staff to appreciate its importance in achieving the organisations goals and objectives. This in turn improves employee engagement while also embedding a culture of accountability for monitoring risks corporately and individually.