subject: The Advantages Of Risk Management [print this page] Any business has some inherent risks it is supposed to take in order to achieve its objectives. Risk management is of big help when it comes to identify, evaluate, control and review the risks. There is no way to avoid them and are parts of our daily decisions.
External risks are the ones out of the control of the management. There is always a new threat and these external risks may come from political environment, natural disasters and changes in exchange rates or maybe a change in interest rates. There are, also, risks under the control of the management that include non-compliance in financial reporting.
Media has a constant interest upon two key factors. They are the risk management and the business continuity. For some reasons, there are companies that fail to take prevention and protection measures. This only makes them exposed to unnecessary risks. Delay payments or changes in plans are part of the wider spectrum of risk management but are not directly related to business continuity.
There are many reasons that a company should take both risk management and business continuity plans into consideration. These two key factors deal with reputation issues and underline the knowledge that keeps the business running.
There is a strong correlation between risk management and business continuity. There are basic elements that a business needs to function and risk management takes care of them. Then, a continuity plan supports the company to advocate the needed actions before and after an incident occurs. This results in a better protection for staff, systems and property.
There is not just a vendor or a division affected by the business continuity plan. It affects the entire company. It also protects the trademark, the goodwill and the reputation of the company. Corporate management is about a good risk management along with a good management practice. Ignoring the risks will only bring a loss of shareholders' wealth and other undesirable consequences.
Risk is part of everything we do. A reasonable best to manage it will turn into a better protection of staff, improved decision making and a better management at all levels and efficient use of the resources. It also brings improved working environment, fewer surprises and increased certainty. Risk management means keeping risk under control and a gained flexibility at the time it is most needed.
