News & Events
Does your organisation have a risk aware culture?
The importance of a forward-thinking, holistically-oriented approach to risk, both internal and external, cannot be overstated. It safeguards organisations from unexpected losses and helps leaders and managers to make well-informed decisions.
By taking risk seriously, and not just a trawl through the risk register at the quarterly board meeting, organisations will become more effective at identifying, assessing and mitigating real, known and potential risks. It also helps as organisations face increasing pressures from stricter regulations, compliance requirements, competition, and the need to adapt to crises.
Effective risk management requires clarity, communication, and technology. Software solutions and analytics serve an intrinsic role in building an effective risk management approach, as they bridge data silos, provide access to resources and tools, and minimise risk inconsistencies across an organisation.
You can read the full article on the ILM Website on how you can implement a proactive risk management culture in your organisation >Implementing a risk aware culture
In the meantime, here are some key highlights:
What are the benefits of a developing a risk aware culture?
- drive competitive advantage and sustain future growth
- anticipate potential risks and take action to reduce or eliminate them before they occur.
- think and plan ahead and identify potential threats, analyse their likelihood and severity, and take preventive measures to reduce or eliminate them.
- Save time, money, and resources, while also reducing the likelihood of disruption.
- more ready and able to capitalise on opportunities
- build trust with external funders, investors, shareholders, customers, communities; everyone really.
What are the key elements in proactive risk management culture?
- A strong risk culture set from the top that defines roles and responsibilities for all stakeholders
- A risk appetite statement that serves as a roadmap for combining strategy setting, business plans, capital, and risk
- A governance model that measures and reports on risk while embracing operating and support areas
- A robust internal control environment that reduces inherent risk to an acceptable level
- A measurement and evaluation process to assess significant risks, both individually and collectively
How do we measure and evaluate our approach to risk?
- Establish a baseline of performance indicators and tracking changes over time
- There are various metrics such as the ratio of risk management initiatives to the number of incidents, the number of successful risk management initiatives, and the impact of those initiatives on the overall performance of the organisation.
- Organisations should also consider qualitative measures such as the level of employee engagement and satisfaction with risk management strategies.
- Surveys, focus groups, and interviews can provide valuable insight into the impact of the culture on the organisation, allowing for a more holistic view of the effectiveness of the implementation.
Final Thoughts
A key element of measuring the success of such a culture is to review the performance of the senior managers and their teams in light of the management theories and models. And to ensure that they have the required knowledge, skills and behaviours required to develop, implement and measure the effectiveness of your organisations approach to risk.
The new ILM Level 7 Strategic Leadership and management qualification can provide a framework for evaluating the performance of senior and strategic leaders, with content specifically provided on risk management strategies. The qualifications also provide the opportunity to develop an action plan to address any areas for improvement. Find out more about Level 7 Certificated and Diploma in Leadership and Management
Our Senior Leader Level 7 Apprenticeship standard is an alternative qualification to consider for employers and learners based in England, UK who can use the apprenticeship levy.