Page 36 - Insurance Times JUNE 2022

Introduction more than you can afford to lose, and risk
By implementing a risk management plan and considering enough so that a win is meaningful. If there is
the various potential risks or events before they occur, an no such amount, don't play.
organization can save money and protect their future. This
- Ed Seykota
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 strategies.”

Other important benefits of risk management
Here is a list of some best practices for risk
include: management:
a. Creates a safe and secure work environment for all staff
1. Involve Stakeholders
and customers.
Behind every risk are individuals, groups or social actors who
b. Increases the stability of business operations while also are affected by risk. These stakeholders are dynamic and
decreasing legal liability. likely to change during the course of the process. Some are
constant, while others come and go, and others may join in
c. Provides protection from events that are detrimental
at different stages of the process. Therefore, it is important
to both the company and the environment.
for the organization to engage with these stakeholders.
d. Protects all involved people and assets from potential
harm.
Stakeholder participation in the risk management process
e. Helps establish the organization's insurance needs in is becoming increasingly recognized as a means of producing
order to save on unnecessary premiums. decisions that are responsive to the varying interests and
values. The benefits of engaging stakeholders are many and
Here's the essence of risk management: Risk no
36 The Insurance Times, June 2022