Risk management helps a company's management handle uncertainties, both the associated risks and opportunities. This way, businesses can make the most out of chances to create value. Best results are achieved when management comes up with a smart strategy and goals to find the right balance between growing the company and managing the associated risks. In addition, resources should be used wisely to maximize efficiency and reach the corporate objectives reliably.
Aligning goals with the risk appetite
Risk management considers the amount of risk the company is willing to take when setting strategic goals and finding ways to manage the associated risks.
Making well-founded decisions
Risk management helps to identify risks precisely and to take the appropriate measures to deal with them: risk avoidance, mitigation, sharing, or acceptance.
Organizations can identify potential events earlier and plan how to respond to them in advance. This minimizes surprises and reduces the associated costs and losses.
Managing comprehensive risks
Every organization faces a variety of risks that affect different business areas. Risk management allows targeted measures to be taken to counteract these overriding risks.
By considering an entire range of potential risk scenarios, the organization's management is able to identify opportunities and use them proactively.
Improving use of capital
By receiving extensive and reliable risk information, management can better assess overall capital needs and thus improve the allocation of capital.
When introducing risk management (aka Enterprise Risk Management or ERM), it is crucial to consider important challenges from the very beginning to ensure success. This involves meeting the expectations of leadership while also getting the teams on the frontline (1st Line of Defense) involved. The goal is to make ERM not just a task, but a tool that genuinely benefits the company.
This also plays a decisive role in the context of the ongoing improvement of risk management. When management and the 1st Line of Defense actively show commitment and participate in the process, only the sky is the limit. Additionally, to maintain a clear and organized approach, it is vital to implement the established risk management framework consistently throughout the company - regardless of different company cultures and sizes.
- Perform effective risk management within the framework of a comprehensive GRC (Governance, Risk, and Compliance) concept
- Save valuable time with ready-made workflows and automated generation of reports for each quarter and year
- Evaluate entire risk scenarios and their consequences with ease, using built-in simulation functions
- Document incidents of loss directly in the tool and let it automatically calculate net risks for you
- Adjust rating scales and risk types in the GRC software as needed to ensure the tool suits your company's processes and needs
- Integrate various risk managers at different business locations without a hitch
For a solid and lasting risk management strategy in your company, it is advisable to choose a reliable and mature risk management software. This software can mirror your current processes and give you a method that matches today's standards, like ISO. Here is what you gain:
- Transparent representation of all risk management processes involved
- Audit-proof mapping of all processes
- Automatic logging of all changes made by users
- Precise representation of the risk situation in the desired level of detail
- Fast access to necessary information for audits and certifications
- Valuable time savings thanks to pre-set workflows
Modern risk management brings together skills, methods, processes, and tools. This lets organizations meet their goals reliably and handle uncertainties with confidence.