Management teams will be familiar with carrying out risk audits. Scenario modelling can range from a major IT failure to a plant explosion. By understanding and evaluating day-to-day processes, businesses can assess the many risks they face and build appropriate response and mitigation strategies. This requires three key components:
- Understand the core risks to the business and how they evolve
- Establish a suitable structure to manage change
- Develop a robust communications strategy, incorporating crisis management processes
Effective risk management is not a box-ticking exercise. Processes that drive boiler plate responses or delegate risk management too far down the organization need a rethink, and must take into account the day-to-day risks of operating—particularly in highly regulated environments.