Business understanding

Risk management is the process of identifying, assessing and managing potential issues that could have a negative impact on an organization’s business operations and financial performance. It involves being mindful of potential risks and what could go wrong — both the expected and the unexpected. Risk managers must be aware of all forms of risk…

If there’s one thing governments do well, it’s regulating things. Regulations are constantly being added and updated. Risk managers must invest some of their time to stay up to date on all the changes and understand new and evolving regulatory requirements.

All the problem-solving skills in the world are useless if managers can’t rouse the troops. Risk managers need good people management and leadership skills to inspire and incentivize staff members. In some cases, risk management might require upsetting the apple cart, and managers need the respect of their team through the inevitable challenges.

After preparing the ranked list of risks, a risk manager then needs to lead the process of planning how to manage them. That could include accepting risks that are deemed reasonable based on an organization’s agreed-upon risk appetite and risk tolerance or adopting strategies to mitigate risks so they pose less of a business threat. In other…

After assembling a list of potential business risks, risk managers need to be able to do a risk assessment and then rank the likelihood and severity of each risk. They should create and regularly update a list that notes the most likely to least likely risks, as well as the most severe to least severe ones. This…

Risk management requires constant education and keeping up with relevant news, trends and issues. Not so long ago, no one had heard of ransomware. Now, it’s one of the greatest cybersecurity threats that companies face. News sites and industry journals should be regular reading material for risk managers.