Do you have the systems in place to identify threats to your objectives?
Risk management has come a long way in the past few years – whether you are putting in place a risk management framework for regulatory reasons or to comply with best practice, the benefit of experience cannot be underestimated.
Risk management is much more than insurance against fire, theft or flood. Senior management in a business often know what risks there are to the achievement of objectives but struggle to demonstrate this to key stakeholders or to monitor the effectiveness of controls in mitigating their risks.
An embedded risk management framework encourages greater risk awareness throughout an organisation and provides early warnings of threats to the achievement of these objectives.
If you work internationally, you are faced with even more external risks and controls. Assurance from risk management is an important part of your organisation’s sound governance.
Your risk management system
Assessing and managing risks can be a time-consuming task. Mazars can help you with your strategy by creating a proactive risk management system. We will make sure that you are armed against potential problems by having the following procedures in place:
- a risk management policy and strategy;
- an appropriate risk appetite or level of exposure for assessing residual risk;
- a regular review and reporting structure, including reports on risk management and internal control from the internal auditor;
- a risk committee with clear terms of reference to oversee day-to-day risk and operating on behalf of the Board;
- an organisation-wide risk register;
- a risk prioritisation protocol;
- early warning mechanisms and other risk/key performance indicators;
- risk ‘owners’;
- an ongoing programme of risk awareness training; and
- risk based decision-making.
Risk management: the benefits
- compliance with law and regulations;
- input into strategic planning process;
- proactive management of risk;
- better allocation of resources;
- enhanced communication;
- early warning mechanisms;
- a proactive approach by staff rather than ‘fire-fighting’;
- organisational objectives more likely to be met; and
- enhanced shareholder value.
Risk and Capital Advisory services which range from high level quality assurance reviews to full scale implementation assistance.
Enterprise Risk Management (ERM) is becoming more relevant for financial services companies and can help insurers successfully manage risks and use them to their advantage.