The Best Practices for Managing Risks
Navigating today’s threat landscape
Business risk and business opportunity come in pairs
Organizations all over the world face risks that can potentially affect their businesses in negative ways. In financial services, risk management focuses mainly on identifying and measuring and analyzing those risks to reduce opportunity, material, reputation, and other costs. Essentially, the operability and success of any business organization depends majorly on how well the risks are managed at the organization.
In his book, The Great Pearl of Wisdom, Bangambiki Habyarimana says that business risk and business opportunity come in pairs. So, risks are part and parcel of any business organization. It’s our role to identify them, measure them, analyze them and mitigate the reasonable ones in our business strategic plans.
Navigating the threat landscape
The threat landscape of business organizations continue to grow. You should, therefore, apply only the best risk management practices like the ones listed below:
• Know all the potential risks that could potentially affect your organization
• Involve all stakeholders in every step of the way, starting from the initial risk assessment
• Create a very strong risk culture, which is simply the values, attitude, and beliefs about potential risks by a dedicated group of individuals
• Have risk management policies clearly documented and put in place clear procedures and policies defining mitigation of all identified risks
• Continuously monitor the processes that you have put in place to mitigate the risks
• Communicate the risks and measures to mitigate them to the entire business organization
Every business organization has threats that are distinctive to their environment. While it is important to take measures that work towards reducing risks that are unique to your organization’s environment, the above practices are universal and can be applied by any business organization.