Response to the following:
People working in any organization should be aware of their duties and responsibilities in order to lessen the margins for errors and risks in the organization. The disturbing of tasks encourages employees to recognize and facilitate core organizational functions. Main risk management responsibilities for the risk manager:
• Develop the risk management policy and keep it up to date
• Facilitate a risk-aware culture within the organization
• Establish internal risk policies and structures
• Co-ordinate the risk management activities
• Compile risk information and prepare reports for the board
There is a need to ensure that the administration receives sufficiently broad support from all the stakeholders. It will usually be a board member who sponsors risk management awareness at the board and presents risk management reports to it. Regularly, the risk manager will report to that board member.
The risk manager determines how to manage the prioritized risks by using risk management strategies. So the next task is to develop a written plan which outlines what steps should be taken to manage major risks and allow the organization to carry out the business with the minimal chances of failure. The plan should describe a proposed strategy or combination of such policies being implemented into the project. All the procedures are usually executed with the help of a risk management solution team.
The four basic risk management strategies that every manger should consider in the plan are;
“Avoidance” Strategy. Focus on ways to avoid or cease risks to provide a service or conduct an activity considered too risky.
“Modification” Strategy. Focus on changing and modifying the project’s activities so that the possibility of a threat happening and the result of potential harm can be taken within acceptable limits.
“Retention” Strategy. evaluating the success of the plan of the identified risks and gets prepared for the consequences.
“Sharing” Strategy. A risk management application’s functionality for user collaboration and online communication, the risk management team, can consider sharing the identified risks with another group or organization. Examples of risk sharing strategy include mutual procurement agreements with other performing companies.
However, Sometimes these strategies and plans would be difficult to deploy or implement for different reasons; such as; Some managers would not have the full authorization from the firm or the organization’s board to implement such a significant strategy, outside risks that weren’t identified or expected that might cause harm to the organization. And the miscommunication between different departments or the risk manager.
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Risk management is an essential aspect of any organization as it helps in minimizing errors, reducing risks, and ensuring smooth operations. In this content, the main risk management responsibilities for a risk manager will be discussed, along with the importance of developing a risk management plan and the strategies used to manage risks.
The main responsibilities of a risk manager in an organization include developing and maintaining the risk management policy, fostering a risk-aware culture, establishing internal risk policies and structures, coordinating risk management activities, and preparing risk information reports for the board. These responsibilities are crucial in ensuring that the organization is well-prepared to identify, assess, and manage potential risks.
By developing and keeping the risk management policy up to date, the risk manager ensures that there is a clear framework in place for managing risks within the organization. This policy will guide employees on how to handle risks and serve as a reference point for decision-making. Additionally, the risk manager plays a vital role in creating a risk-aware culture within the organization. This involves promoting the importance of risk management among employees and ensuring that they are trained and equipped to identify and address risks in their respective roles.
Establishing internal risk policies and structures is another responsibility of the risk manager. These policies and structures outline the processes and procedures that need to be followed when managing risks. They provide a consistent approach to risk management and ensure that risks are identified, assessed, and addressed systematically across the organization.
The risk manager also coordinates the risk management activities within the organization. This involves working closely with different departments and stakeholders to ensure that risks are evaluated and managed effectively. By coordinating these activities, the risk manager ensures that there is a cohesive and integrated approach to risk management.
Furthermore, the risk manager compiles risk information and prepares reports for the board. It is essential to keep the board well-informed about the organization’s risks and the strategies in place to manage them. This enables the board to make informed decisions and provide necessary support for risk management initiatives.
To manage risks effectively, the risk manager needs to develop a written plan outlining the steps to be taken in addressing major risks. This plan should include strategies that focus on risk avoidance, modification, retention, or sharing. The risk manager, along with a risk management solution team, implements these strategies to minimize the chances of failure and ensure smooth operations.
However, there may be challenges in implementing these strategies and plans. Some managers may face difficulties in obtaining authorization from the organization or board to implement significant risk management strategies. Unforeseen risks that were not identified or expected can also pose challenges to the execution of risk management plans. Additionally, miscommunication between different departments or the risk manager can hinder the implementation of risk management strategies.
In conclusion, the risk manager plays a crucial role in ensuring effective risk management within an organization. By developing and maintaining risk management policies, fostering a risk-aware culture, coordinating activities, and preparing reports, the risk manager helps in minimizing errors and risks. Developing a written plan and implementing risk management strategies further strengthens the organization’s ability to mitigate risks and ensure successful operations. However, challenges in implementation may arise, and addressing these challenges requires effective communication and collaboration among different stakeholders.