Development of Risk Management Policy

Each organization's purpose is risk free operation, although the truth is, however cautious, there is always the risk of unexpected and unplanned threats.

Implementing a risk management policy within an organization is the best way to identify and address threats before they become a costly problem.

Incorporating such a policy into day-to-day operations will also help you make well-informed decisions as decision-makers are better able to understand and appreciate the wider impact of their actions. Organizations that do not yet have such a policy have foundations that are part of development: [a] Risk Assessment and Identification

What are the dangers for the organization now and in the future? Are there any vulnerabilities that cause the organization to be a threat? Account must be taken of information, tools, personnel, fame, legal, financial and technical aspects that may be at risk.

At this stage of the process, consideration should be given to what controls and measures are already in place to address the risks. This helps identify deficiencies found in current risk strategies that require strength.

(b) Risk Classification

To accomplish this task, it is a good idea for organizations to accept some form of risk grading system. This helps to ensure consistent analysis and ranking of risks and focus on resource allocation.

The ranking of the risk in the logical framework is a useful exercise. The categories of ranking may include the significance of the risk. High, Medium or Low Priority. Operative or Strategic?

(c) Action Plan

An Action Plan details whether each risk is effectively addressed and to whom. The plan divides individual risks into a person or organizational unit and clarifies the expectations of handling threats.

The plan also takes into account the resources available to address the risk, cost-effectiveness and deadline for completion of the proposed corrective action.

d) Evaluation and Review

Risk Review is a continuous process. Risk management activities should be reviewed at regular intervals to reveal efficiencies and shortcomings

Where weaknesses occur, this will allow for the modernization and strengthening of processes against repeated threats.

(e) Compliance

If necessary, policy should ensure that supervision and correct measures comply with quality standards and corporate governance.

(f) Review and Repair

Risk management policies are a developing animal and must be under constant control to ensure they remain relevant and effective. New risks are needed, because of the less significant risks, removal is required. Allocation of resources may need updating and redeployment of responsibility according to the findings. All this provides a strong policy that is ready to respond to the organization's present and future threats.

After implementing a risk policy, sound administration is required to ensure compliance with legal and regulatory obligations. The use of risk management software is an efficient, consistent and cost-effective tool for automating key risk management processes throughout the organization, while performing the necessary controls and actions

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