Does your business have some strong risk management policies and frameworks in place? Doing business is a risky affair and you can’t avoid risk. So it’s really important to have a risk mitigation framework in place. There are certain key parameters that you need to focus on while trying to deploy an appropriate risk mitigation framework. In this article, we discuss particular aspects that you cannot possibly ignore as this may otherwise derail your growth. In fact, all the things that you’re working so hard for can be derailed.
Strong Governance Forms The Foundation Of An Effective Risk Management Strategy
Start off by setting up a strong corporate governance mechanism. If you’re going to get external lending and funding, then it’s important to have strong governance in place. Here, you’ve got to look at not only statutory compliance but you should also make sure that everything is done and reported in a transparent way.
Recognize some of the key prevalent internal and external risks and develop appropriate policies and frameworks to address them.
Identify Risks, Prioritize Them Based On Criticality, And Develop Measures
Try to identify risks. You need to evaluate:
- All the areas of possible revenue loss,
- The compliance issues that can arise,
- Some of the business disruptions that can occur
- The possible loss of reputation that may take place.
When you do a SWOT analysis, these are the key threats or weaknesses that you may come to identify. Once you’ve identified them, develop guidelines to prioritize the key risks based on criticality, to identify the most critical thing that you’ve got to address and to start setting up measures to mitigate those particular risks.
Automation Is The Key To Creating Efficient Risk Mitigation Procedures
Once you identify the risks, check if you are you able to use technology to facilitate risk management. This is important as doing things manually will not only be a time-consuming process, but it could be prone to error as well. But if you have technology that can help you automate some of these activities, then this will actually help you reduce errors, get things done fast, and make sure that risks are mitigated.
Here’s my video on Risk Management.
You should have key risk management in place to promote continuous growth.
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Like, share, and comment about some of the risks that your business has faced and what you are doing to mitigate those risks. Thank you.