Establishing a Risk Management Protocol

When it comes to risk management, communication must be established so that everyone is aware of their responsibilities and what is expected of each person. This applies, of course, to employees acting at the individual level or as a member of a working group. What is important is that the communication can convey a clear summary of the risk management philosophy for the company and each member of the organization as part of the risk management program.

This can be accomplished with the use of various media. A company may choose to use manuals, memos, videos, conferences, or presentations. Cane Bay Partners can help with this process.

Establishing a protocol

Establishing a risk management program is one thing; making sure it works is another. This is the duty or role of any risk management professional. There must be procedures in place to assess the presence and operation of all components continuously.

Activities to consider

The monitoring can be done either with the use of recurring events or through the use of periodic evaluations of different activities. These two approaches can, of course, be carefully combined. The number of activities is specified to ensure the operation of the enterprise risk management program. Nevertheless, routine reports may suggest a series of actions that assumes:

  • That the variances between actual and budgeted results are verified by competent managers to see if there are gaps in risk anticipation
  • That any value-at-risk model be used to determine whether responsibility centers or departments operate using previously planned and identified risk tolerances
  • External information generated by customers or suppliers may also be used to confirm or disprove other external details
  • That information on risk management processes and their functioning can also be obtained by means that may have repercussions on respect for the organization with its statutes and regulations
  • Continuous review of procedures by the internal and external auditors of the company
  • That training seminars and group or individual interviews can create some interest in the work of risk management and be a catalyst for the process and its operation

The other approach of monitoring induces separate evaluations. These evaluations or reviews can be performed by the internal audit department or by a good self-assessment of the services.