How will digital, new technologies, the global economy, politics, legislation, cyber security, ethics, and even climate change impact business and the Finance department? How ready is your business to change how you think about Risk? How can your business and board better exploit the opportunity implicit in risk and uncertainty to drive better business outcomes?
Self-assess how ready your organisation is:
0% Ready – Where to begin?
Unable to exploit strategic opportunities? Risk and risk management regularly features on the board agenda, irrespective of sector. It’s essential to place ‘risk’ in a positive context so your business can take the risks that lead to opportunities as well as mitigating the ones that bring losses. Never more so than today, when changing business environments present uncertainty and literature and regulatory requirements abound. Take action now by reading the ACCA (www.ACCAGlobal.com) report, ‘Risk and the strategic role of leadership’.
25% Ready – Made a good start?
You’ve made progress by conducting effective risk assessments and setting up the right reporting structures. These will enhance the governance capabilities of your board and help your organisation avoid deviating from its objectives. Now you need to discuss and decide on how strategy and risk interact in your business. Is it strategy first, risk management second, or do you integrate risk at the outset to inform the choice of strategy? Which model you choose will help define the future of your business.
50% Ready – Halfway there?
You’ve decided to integrate your strategy and risk decisions. Now you need to look beyond the board, because how it embeds risk in its decision-making will echo out into the wider organisational body. Are there lessons to be learnt from mishaps and failures? Use them as an opportunity to test the resilience of the risk framework and the appetite for risk of the company as a whole.
75% Ready – Feeling confident?
You’ve not only successfully managed significant risk events, but you’ve used them as opportunities to further improve your processes. Remember to communicate your risk management strategy across the company, but also keep an ear to the ground. Send your NEDs out into the business to socialise and build their qualitative understanding of the organisation’s cultural attitude toward risk.
100% Ready – So, what’s next?
Congratulations – you’ve build an integrated, dynamic risk management strategy. Its resilience is further enhanced by the fact that the board is open to constructive challenge, which prevents stagnation and complacency. However, a changing environment means even the best risk management may not remain adequate for long. In the meantime, don’t forget to share your success by teaming up with ACCA to promote best-practice across your industry.
At ACCA, we have always looked ahead to anticipate change and understand its impact on business, finance and the profession. We are working in partnership with employers around the world to help support them in preparing for that change. As part of a new initiative, we have looked at 10 major drivers of change and are inviting employers to explore just how ready their businesses are to cope with them.
Find out more on the ACCA website.