10 Practices to Improve Risk Management and Maximize Value

Learn 10 practices to improve your company's risk management & maximize value from the ISO 31000 standard. Identify & evaluate opportunities & risks with an open dialogue between key executives & stakeholders.

10 Practices to Improve Risk Management and Maximize Value

Any gap in your company's responsibilities represents a greater opportunity for risk. Carrie Frandsen, ARM-E, CRMP, Director of Risk Management and System-wide Business Risk Management at the University of California, is an expert in helping organizations improve their risk intelligence. The ISO 31000 standard, Risk Management: Guidelines, provides guidelines and best practices for improving risk management, regardless of the size of the organization. To that end, here are 10 practices that will help management and directors maximize the value derived from the risk assessment process.

It's easy to fall into the trap of evaluating one risk at a time to simplify response plans, but this becomes a risk in and of itself. Boards of directors and executives should consider how the organization's strategy and risk appetite work together and how they will drive behavior across the organization when setting business objectives, allocating resources and making key decisions across the organization. A solid risk management plan can help close loss gaps, address complacency, and strategically position future objectives. The board should be informed of the results of the risk assessment in a timely manner to ensure that directors agree with management's determination about significant risks and can incorporate the organization's most critical risks into the board's risk oversight process. The risk assessment process should encourage an open and positive dialogue between key executives and stakeholders to identify and evaluate opportunities and risks.

The process should be designed to identify patterns that connect possible interrelated risk events, so that they can be taken into account in the risk response design. Once you've identified risks and how to manage them, you can focus on positive risks, such as increasing efficiency through technology, which could ultimately dominate the market and allow for continued development and growth. A business risk assessment (ERA) is a systematic and prospective analysis of the impact and probability of possible future events and scenarios in achieving an organization's business objectives within an established time horizon. The results of the assessment can be included in a risk heat map, which is a visualization tool that helps prioritize risk. The above practices can help organizations define their specific risks and assess the appropriateness of the processes that underpin risk management and risk oversight by the board of directors. As risk managers seek to continue to improve and evolve risk management capabilities, these suggested areas of focus can help manage the complex agenda with greater confidence and results. Identifying improvements to your company's risk management is essential for ensuring safety in your workplace.

To do this effectively requires an understanding of how strategy, objectives, resources allocation, decision-making processes, stakeholder engagement, interrelated risks events identification all come together. By taking these steps into consideration when assessing risks you can create a comprehensive plan that will help close any gaps in responsibilities while also providing an opportunity for growth. To ensure success in your efforts it is important to have an open dialogue between key executives and stakeholders when identifying risks as well as evaluating opportunities. Additionally it is important for boards of directors to be informed about results from assessments so they can incorporate any critical risks into their oversight process. For more detailed information on how to create or improve risk management plans and take advantage of risk opportunities for continuous growth in your organization contact your Moss Adams professional.