Risk management is the process of identifying, assessing and controlling financial, legal, strategic and security risks to an organisation’s capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters.
If an unforeseen event catches your organisation unaware, the impact could range from being minor, and considered to be an avoidable nuisance, to a worst-case scenario of being catastrophic and having serious ramifications for the ongoing future operations of the business.
To reduce risk, an organisation needs to apply resources to minimise, monitor and control the impact of negative events while maximizing positive events. A consistent, systemic and integrated approach to risk management can help determine how best to identify, manage and mitigate significant risks.
At the broadest level, risk management is a system of people, processes and technology that enables an organisation to establish objectives in line with values and risks.
A successful risk assessment program must meet legal, contractual, internal, social and ethical goals, as well as address technological risks. By focusing attention on risk and committing the necessary resources to control and mitigate risk, a business will protect itself from uncertainty, reduce costs and increase the likelihood of business continuity and success.
The risk to businesses can range from:
Operational and market
Credit, interest rates and refinancing
Counterparties, creditors, customers
Personnel and key person
Legal, regulatory, fraud and compliance
Reputation
Insurance policies
Identifying and addressing various risks can be an increasingly complex and evolving area, which includes significant burden on the organisation and needs a high level of technical understanding. However, the impact of an unexpected risk could have a detrimental impact on the ongoing operations of the business.
A CFO will have the experience and expertise to take charge of these areas of the business and allow the business owner and management team to concentrate on building, growing, and furthering the success of the organisation.
Services
The services that Executive Financial Services provides include:
• Risk management and mitigation strategies
• Policies and Procedures
• Insurance review
• Resource capability assessment (financial, human and technological)
• Business needs and requirements
• Risk Management Statements and Disaster Recovery Plan development