In today’s fast moving economic climate, evaluating and
managing risk is essential to the future success of any business.
environment has changed significantly as a result of the world
economic downturn, and as a result the risk profiles are changing
Risk management has become a vital ingredient in the entrepreneurial
culture needed to develop, expand and improve business performance.
There is clear evidence that good risk management will add
considerable value to the business.
The ability to manage significant risks effectively is an increasingly
critical success factor for all organisations, irrespective
of the sector they represent. Badly informed or poorly executed
on the other hand, can easily spell disaster (as recent high
profile failures have demonstrated). The requirement for
an enterprise approach
to risk management (known widely as ERM) is therefore crucial
ERM encompass the entire business, creating connections between
the business functions
and connecting the “silos” that often arise within large,
mature, and/or diverse corporations
An ERM process will address the full spectrum of risks, including
compliance, strategic, environmental, social, customer service,
security, IT, reputation and business continuity.
Any organisation that has encountered unwelcome surprises or unexpected
realise that most of these were preventable. Such events will
almost certainly have been caused by risks that were not fully understood
or by the processes to mitigate those events being inadequate. The
result is that risk management has been catapulted from being a
useful tool to become the very pulse of the organisation and the
yardstick by which its management is judged.
The key is to recognise that risk is not something that should
be avoided – a risk is often an opportunity in disguise.