Page 9 - Risk Management Bulletin April-June 2022

RMAI BULLETIN APRIL - JUNE 2022

engaging stakeholders are many and include a better Effective tone at the top is a prerequisite to a
understanding of the risk, building trust and credibility commitment to continuous improvement that is so
as stakeholders feel involved in decision-making and essential for risk management to function effectively.
actions affecting their future, stakeholders feel that
their interests are taken seriously by the organization. A leadership failure and the organizational “blind
spots” that contribute to dysfunctional behaviour will
almost always undermine even the strongest risk
management capabilities.

An organization’s culture can have a huge impact on
its ability to prevent the occurrence of unacceptable
risk events and identify new and emerging risks in a
changing operating environment.

Tone at the top is a balance between creating and
protecting enterprise value. For example, if
management’s focus is always on the short term, i.e.,
Engagement generates mutual understanding and the next month or quarter, the organization could end
sharing of responsibility if things go wrong. It also up undertaking risks that
allows risk stakeholders to express their opinion on the mortgage the future.
risk and the actions taken by the organization to
address it, as well as its potential outcome. Engaging 3. Communication
with a variety of stakeholders provides a platform for A risk manager’s job is to evaluate risks, of course –
different voices to be heard. Different risk stakeholders but communication of these findings to board
can be consulted at different stages of the risk members, senior management and others is crucial. In
management process. fact, without effective and thorough communication,
a risk manager’s role is worthless to a business.
In order to engage appropriately with the stakeholders,
the organization needs to know who they are, and how
they are involved. The following simple steps can be
undertaken to understand, map and plan risk
stakeholder engagement.
Y Identify and analyse risk stakeholders
Y Prioritize risk stakeholders
Y Plan risk stakeholder management
Y Risk stakeholder engagement

2. Tone from the Top

Without effective communication that helps stakeholders
understand the output and consequences of certain
actions, an organization will almost certainly undergo
more harm than good. In fact, most business crises are
not linked to a lack of information or understanding but
a failure to effectively communicate risk.

4. Clear Risk Management Policies
The purpose of the risk management policy is to

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