The importance of accounting firms offering Business Risk Management (BRM) services can never be underestimated. The size and complexity of modern enterprises require systems to manage all of their internal and external business risk, while also being able to respond quickly and efficiently to emerging risks in the market. In essence, this translates into the need for financial advisory firms to understand and provide effective strategies for managing these business risks. Today, banks and other large financial institutions have become more agile in their approach to risk assessment and management, which is why many professional business advisory firms are choosing to focus on building strategic business risk management programs.
Business Risk Management (BRM) is an important element for tax advisory firm. A key tenet of Business Risk Management is reducing the financial risk associated with investment projects. Business risk is related to the chance that an investment’s actual value will decline in relation to the cost of an asset or portfolio. This is known as “the volatility effect” and is considered a negative economic risk. So, if pandemic disease sweeps through London, or any other city in the world for that matter, the amount of wealth at stake could be substantial for those whose stock investments are located in London.
In a recent study funded by the UK’s Engineering and Mechanics Research Council, researchers looked at the effects of a variety of potential pandemic pathogens on London’s hospitals over a three month period. The researchers found that the three viruses they tested all posed low to medium risks to hospitals. Interestingly, none of them posed a high level of risk to the overall health of the patients who received care in the facilities. The research was conducted by a team of virologists, epidemiologists, and public health professionals, led by Professor Peter Pape from University College London, and was published in the prestigious journal, Emerging Infectious Diseases. The researchers called their study a “Wake-Up Call.”
It is not enough, therefore, for business owners and managers to take a basic course in business risk management, either. They need to have a wake-up call. And that wake-up call should come from the members of their board risk committee. A properly sized and selected board will identify areas of concern and attempt to find ways to mitigate the impact of those risks. Board members will also need to discuss this information with their colleagues in other industries.
Business managers need to understand that the companies they run have a specific set of stakeholders. Among those, they should include the CEO, CFO, COO, stockholders, employees, customers, and their key suppliers. These people have a vested interest in the success of your business and are likely to have strong opinions about how your business should be run. As a business manager, you have a responsibility to listen carefully to what their thoughts on risk are and to implement measures to mitigate those risks. That means developing policies and procedures to address issues that arise as a result of business risk.
When it comes to business risk, it is important that all of the stakeholders understand that their needs will be considered by the risk manager. This will help to ensure that they feel heard, and that their views are considered. In fact, when you are developing policies and procedures to address risks in your company, remember that you want to be responsive to the views of every member of your team. You want to put risk in perspective and explain why the risks are there. If you make a mistake, say something wrong, or provide an inadequate response, it is incumbent upon you to explain why that is being done and how it is being done.
As a business manager, it is important to remember that when it comes to managing business risk, what you do today can have an impact on how your company runs tomorrow. Today, it’s important to keep in mind that if you don’t take steps to manage business risk, you might be doomed to failure. One of the best ways to do this is to get everyone in the group together to review risk policies. This will ensure that you are providing the best possible risk protection for the future of your business.
Remember that business risk management is not a simple matter, and it doesn’t happen overnight. It takes some time to determine the risks that exist, develop appropriate strategies to address those risks, and train the employees to do their part in reducing those risks. The manager doesn’t “create” business risk. He or she is simply an advocate for making sure that business owners understand the risks they face and the need for effective ways to manage them. The advocate also promotes the organization’s commitment to safety and security.
