Page 8 - Risk Management Bulletin April-June 2022

RMAI BULLETIN APRIL - JUNE 2022

Introduction and risk enough so that a win is
By implementing a risk management plan and meaningful. If there is no such amount,
considering the various potential risks or events before don't play.
they occur, an organization can save money and - Ed Seykota
protect their future. This is because a robust risk
management plan will help a company establish
procedures to avoid potential threats, minimize their
impact should they occur and cope with the results.

This ability to understand and control risk enables
organizations to be more confident in their business
decisions. Furthermore, strong corporate governance
principles that focus specifically on risk management
can help a company reach their goals.

Best Practices in Risk Management
Risk has a constant presence in the business world and
ignoring it does not make it go away. On the contrary,
understanding a company’s exposure and practicing
risk management are the first steps toward a healthier
business.

The AICPA defines Business Risk as risk “resulting from
significant conditions, events, circumstances, actions,
or inactions that could adversely affect an entity’s
ability to achieve its objectives and execute its
Other important benefits of risk strategies.”
management include:
a. Creates a safe and secure work environment for Here is a list of some best practices for risk
all staff and customers. management:

b. Increases the stability of business operations while 1. Involve Stakeholders
also decreasing legal liability. Behind every risk are individuals, groups or social
actors who are affected by risk. These stakeholders are
c. Provides protection from events that are
detrimental to both the company and the dynamic and likely to change during the course of the
environment. process. Some are constant, while others come and go,
and others may join in at different stages of the
d. Protects all involved people and assets from process. Therefore, it is important for the organization
potential harm. to engage with these stakeholders.

e. Helps establish the organization's insurance needs
in order to save on unnecessary premiums. Stakeholder participation in the risk management
process is becoming increasingly recognized as a
Here's the essence of risk management:
means of producing decisions that are responsive to
Risk no more than you can afford to lose, the varying interests and values. The benefits of

6