Does Managing Business Risk Really Protect Your Business?
16 March 2016
Over the past 20 years in risk management, when I ask business owners or leaders the following question, I receive a range of responses.
How do you manage your business risks?
I’m often told there is a risk plan in place but risk is primarily managed on a daily basis by experienced managers and employees who are well trained in their responsibilities. In larger organisations, I mostly find that the risk function can be remote from day to day activities and is typically reactive in nature.
Unfortunately neither approach is completely adequate to manage risk to your business nor is it making the most of how risk management can add value to your business.
The challenge is integrating risk management with the other business functions. As one manager expressed it – ‘Beyond compliance, there is room for improvement in the way risk management is embedded in day to day activities and business decisions’. Risk needs to become a part of a businesses ethos to protect the business.
In fact, there is certainly a growing understanding that risk management can help the business in a positive way to assess and pursue opportunities for growth… Just ask a business owner or executive who has an effective risk management process in place if he or she wants to give it up.
Accenture’s Global Risk Management Report 2015 found that “85% of respondents to their survey believed that risk management has helped their business generate long term profitable growth, at least to some extent”. Also, “more than 71% (almost two thirds) warned that a lack of integration with other business functions is impeding the overall effectiveness of risk management in their organisation”.
So does risk management really protect your business?
Of course it does. And there are resounding benefits for your business like profitable growth and newly identified opportunities. It’s time to make sure risk management is an integral part of your business strategy for the future.