Page 37 - Insurance Times JUNE 2022

include a better understanding of the risk, building trust and to continuous improvement that is so essential for risk
credibility as stakeholders feel involved in decision-making management to function effectively.
and 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., the next month or
quarter, the organization could end up undertaking risks that
mortgage the future.

Engagement generates mutual understanding and sharing 3. Communication
of responsibility if things go wrong. It also allows risk A risk manager’s job is to evaluate risks, of course – but
stakeholders to express their opinion on the risk and the communication of these findings to board members, senior
actions taken by the organization to address it, as well as management and others is crucial. In fact, without effective
its potential outcome. Engaging with a variety of and thorough communication, a risk manager’s role is
stakeholders provides a platform for different voices to be worthless to a business.
heard. Different risk stakeholders can be consulted at
different stages of the risk management process.

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.
Identify and analyse risk stakeholders
Prioritize risk stakeholders
Plan risk stakeholder management
Risk stakeholder engagement

2. Tone from the Top
Effective tone at the top is a prerequisite to a commitment
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 provide
guidance regarding the management of risk to support the
achievement of corporate objectives, protect staff and
The Insurance Times, June 2022 37