Practical ideas: CONTINUOUSLY IMPROVE YOUR OWN RISK MANAGEMENT SKILLS

Risk management has evolved significantly over the last 10 years and we probably haven’t seen the last of the changes just yet. Norman Marks recently called for a leap change in risk management guidance. Alex Sidorenko, one of the authors of this guide, has also published a series of articles calling for a major change… Continue reading Practical ideas: CONTINUOUSLY IMPROVE YOUR OWN RISK MANAGEMENT SKILLS

Practical ideas: BUILD YOUR OWN NETWORK OF RISK ADVISORS

We always encourage risk managers not to reinvent the wheel. Learn from others. Build connections with risk managers from similar companies. A good place to meet similar minded risk managers is the G31000 group on LinkedIn https://www.linkedin.com/groups/1834592. Do not be afraid to share your own experiences or participate in online and face-to-face discussions or initiatives… Continue reading Practical ideas: BUILD YOUR OWN NETWORK OF RISK ADVISORS

Practical ideas: TAKE OWNERSHIP OVER SOME RISK ASSESSMENTS

At the risk of sounding controversial, we believe risk managers sometimes need to take responsibility for providing an independent risk analysis not based on the information supplied by the management. Although rare, there may be situations where manager approving the project or making a decision has significant conflicts of interest or there may be suspicion… Continue reading Practical ideas: TAKE OWNERSHIP OVER SOME RISK ASSESSMENTS

Practical ideas: PROMOTE RISK MANAGEMENT AS A SERVICE

Risk managers have a unique competency to identify and analyse risks using advanced tools like scenario analysis, sensitivity analysis, decision trees and Monte-Carlo simulations. This toolset can significantly improve business decision making. And just like any other service or tool it needs to be marketed to the rest of the organisation. Risk management needs to… Continue reading Practical ideas: PROMOTE RISK MANAGEMENT AS A SERVICE

Practical ideas: INFORM MANAGEMENT ABOUT EMERGING RISKS

Risk managers can bring a lot of value to the company by informing management about emerging risks. To do this, risk managers need to establish procedures for scanning the external and internal environment, for identifying emerging risks, recording them and informing senior management in a timely manner. In order to identify emerging risks, risk managers… Continue reading Practical ideas: INFORM MANAGEMENT ABOUT EMERGING RISKS

Practical ideas: VALIDATE MANAGEMENT ASSUMPTIONS

Validating management assumptions is probably the single most important value a risk manager can bring to his / her company. As companies and markets are becoming more interdependent, an issue in one industry or country may have a flow on effect on the global supply chain. The business environment is becoming more volatile. Unfortunately, many… Continue reading Practical ideas: VALIDATE MANAGEMENT ASSUMPTIONS

Practical ideas: Create simple risk escalation mechanisms

Risks rarely happen overnight. There are usually signals, warning signs. Despite their best intentions, executives and most certainly the risk manager are often detached from the operational activities. And while it should be the risk manager’s goal to get involved and at least be aware of what is happening in the company, it is up… Continue reading Practical ideas: Create simple risk escalation mechanisms

Practical ideas: Include risk information into existing internal communication channels

Forget the old-fashioned risk information flows from business units to risk managers who develop risk reports and present them to executives, the audit committee or the Board. There is a better way. Based on the research and interviews we conducted, the internal risk communication should be two-way: Business units should be reporting on their own… Continue reading Practical ideas: Include risk information into existing internal communication channels

Practical ideas: Include risk information in the company’s external communication

Risk disclosure is very important. Increasingly, stakeholders are expecting companies to test and disclose the effectiveness of not only financial risk management but also other business risks, including market, operational, safety, legal etc. When disclosing information about risks to external stakeholders, it is recommended to include at least:

Practical ideas: INTEGRATION INTO DECISION-MAKING PROCESSES

Risk management should not be viewed as a separate, stand-alone process. One of the most effective and yet simple ways to change management’s perception about risk management is to integrate risk analysis into the various decision-making processes. Performing risk assessments for all significant business decisions can dramatically raise decision quality and provide management with valuable… Continue reading Practical ideas: INTEGRATION INTO DECISION-MAKING PROCESSES