Regardless\nof your industry, avoiding potential risks and managing those you do face\nhead-on is of crucial importance to the survival of your business. When\nbuilding, maintaining and growing a business, you are more than likely to come\nacross a great array of pitfalls, and you must do your best to circumvent or\nmanage these if you want to experience success. This, of course, is a whole lot\neasier said than done.<\/p>\n\n\n\n
With\nthis in mind, what are some of the main strategies a business can adopt to\navoid risk and build a sound, effective and comprehensive risk management\nculture within the firm?<\/p>\n\n\n\n
Find\nout here EIMF\u2019s top tips for the development and maintenance of a firm\u2019s risk\nmanagement culture!<\/p>\n\n\n\n
1\nEstablish Standard Risk Management Procedures & Policies<\/strong><\/p>\n\n\n\n One\nof the first things a company should do to establish a risk management culture\nis to develop procedures and overarching policies to deal with risk. If there\nare no standards set in place, employees will not know how to avoid risky\nsituations or handle them when stuck in the middle. Keeping in mind there isn\u2019t\na \u201cone size fits all\u201d risk management solution, these policies and procedures\nmust reflect the company\u2019s overall nature and culture and obviously be built to\nconfront those risks that are most prevalent in the industry.<\/p>\n\n\n\n Procedures must be step-by-step in nature and offer\nemployees and upper management with an easy, clear and effective roadmap to\nfollow when dealing with risk. As noted<\/a> in PwC\u2019s 2018 Financial Services Risk Culture\nSurvey, it is imperative for companies to \u201creview your [companies] risk culture\nframework and make sure it covers a broad but realistic set of dimensions,\nincluding elements of leadership, governance, talent, communication, and global\noperating norms.\u201d Besides assisting in the avoidance and management of risk,\nsetting these procedures and policies from the onset will allow firms to\nminimize future costs, optimize workflow, and ultimately perform in a more\nefficient manner.<\/p>\n\n\n\n 2\nLearn From & Rely On Past Experiences with Risk<\/strong><\/p>\n\n\n\n It\nmight sound clich\u00e9 but learning from your past experiences and avoiding similar\nmistakes is a powerful tool when it comes to the development and maintenance of\na risk management culture within your firm. Hence, it is important to design\nand keep an in-depth risk register that includes all instances of potential and\nexperienced risks, solutions applied or decisions taken, and final outcomes.<\/p>\n\n\n\n For example, Chris Caron, Compliance Director at\nKiewit, an American construction and engineering company, pushed<\/a> the company\u2019s project managers to complete \u201ca\nrisk matrix for their own projects\u201d and fine-tune \u201cthe company-wide risk\nmeasurement scale to better reflect the organization\u2019s risks.\u201d Furthermore,\nas suggested<\/a> by File Minders, a Cypriot company in\nenterprise information management services, integrated risk management can be\nfacilitated via \u201cscanning, data capture, management, preservation and delivery\nof information through structured physical and digital systems encompassing\ndocument management, imaging, records management, workflow and regulatory\ncompliance management.\u201d<\/p>\n\n\n\n As\nyou collect knowledge and data, patterns and trends might emerge that will\nallow you to predict the future when it comes to avoiding and managing risk.<\/p>\n\n\n\n 3\nSet the Risk Management Tempo from Above (or Tone at the Top)<\/strong><\/p>\n\n\n\n It is practically impossible to expect employees to\nadopt a set of risk management procedures and policies if the firm\u2019s upper\nmanagement is not doing the same. Hence, establishing a strong risk management\nculture starts with the company\u2019s leaders. As explained<\/a> by Covercent, a developer of ethics and\ncompliance cloud platforms, \u201cmaking sure that top-level management is using the\nsame messaging and approach that you\u2019ll be promoting will help solidify the\nmessage and give weight to its importance.\u201d A great specific example is the\ncase of Sales Force, the US-based cloud-computing giant.<\/p>\n\n\n\n Sarah Clayton and John Wisdom, who work for PR firm\nWeber Shandwick, report<\/a> in Quartz at Work that \u201cthe alignment process\nstarts at the top with co-CEOs Marc Benioff and Keith Block defining their \u201cV2MOMs,\u201d as they\u2019re referred to internally.\u201d <\/p>\n\n\n\n