Ri'ziliens Essentials - Complex Risk Landscapes
How do you survive the 2015 risk landscape?
What Does the 2015 Risk Landscape Look Like?
The rapidly changing risk environment of recent years has proved challenging for many organisations. 2015 will be no exception with asymmetric risks such as cyber crime, low commodity prices, global political instability and epidemic being high on the list of predicted challenges. These changes have caused business risks to grow to new magnitude, immediacy, and effect.
Some key exacerbating factors include:
Regulatory Fragmentation. Greater focus on transparency and uneven enforcement across the globe.
Information Intensity. Big Data results in greater analytical capabilities and need for greater information protection.
Hyper Transparency. Business conduct is increasingly visible and scrutinised/magnified by instantaneous communication technologies.
The Extended Enterprise. The increased use of offshoring, outsourcing, and shared service arrangements have reduced direct control over risks
What is Best Practice?
Resilient companies employ three standout risk management practices to help deal with the challenges of the modern risk landscape:
Strategy - Incorporate Risk Management in Strategy (and vice versa) and establish a healthy risk appetite. Both growth and risk; the upside and downside of major business decisions should always be considered equally.
Behaviour - Manage Human Behaviour as part of the Risk Management Process. Leading companies encourage and reward managers for coming forward with self-identified problems. In this way, management self-reporting of issues uncovers problems that risk defences may never have detected.
Coordination - Coordinate Disparate risk information for decision makers. Streamlining the data collection process can reduce coordination costs within the business, and integrated analysis and reporting can improve the overall insight value of risk-related reports.