Risk management “is the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact” according to a dictionary. Every organization, whether private, public or government has some exposure to some risk that affects their bottom line. Risk management attempts to manage and mitigate that risk to the organization’s capital. Risk stems from multiple sources, like litigation, strategic management errors, accidents or natural disasters and financial uncertainty, i.e. the economy.
So how does a firm that conducts investigation become risk managers?
Risk Identification
• First, we must identify the risk. It is hard to manage if we don’t know what we are managing. We must not only identify the normal business risks that face any entity but risks unique to our own operational environment. What are we looking at?
o Legal risks, not only judgments but also the costs to defend against a claim or support for litigation we initiate.
o Environmental risks, not just what nature throws at us through weather, earthquake or flooding. But operational risks like power outage, flooding or other natural disasters.
o Through the acts of man, theft, violence in the workplace, criminal activity and terrorism.
o Regulatory includes legislative, statutes, regulations of regulatory agencies including taxes and licensing. For some OSHA or FTC actions can be a factor in accessing risk.
Risk Analysis Process
• Second is analysis. We need to know the scope of the risk. Any internal links between organizational factors and the rick under evaluation. How many businesses does the risk affect? Some risks can bring a business to the point of failure, while others are more inconveniences. We need to map or system with the ‘risk’ framework including documents, policies, procedures and business process. You need to determine the ‘reach’ or effect the risk will have on our operation.
Risk Evaluation Method
• Third is evaluation of the risk. Risks need to be prioritized which means they need to be ranked. Most risk managers break down the risk into categories of risk, based primarily on the risk’s severity. Inconvenient is low risk. Catastrophic is high risk. There may perhaps be several low or inconvenient risks not requiring upper management intervention. But a high rated risk requires quick and decisive intervention from management.
Risk Treatment Plan
• Fourth we need to treat the risk. Elimination is best, but for those we cannot eliminate we need to contain or mitigate their effect. The solution is organizational across the entity. For many risks, like safety issues, requires that everybody is on board and numerous suggestions lead to superior planning and handling of the risk factor.
Monitoring & Review Risk
• Five is to monitor and review the risk. Not all risk can be eliminated, some are always present, some are in the shadows, others are forefront. Constant monitoring is required. A digital risk management system generally is more effective than a manual system. Digital systems just tend to be more efficient. Every industry faces a unique set of mandates and compliance changes that must be coordinated and integrated. Regulatory and standards compliance, incident management, work place investigations, internal audits and quality management are just a few. As marks shift, changing regulations and internal restructuring there is need to monitor the shifting risk factors affecting the entity. A strategic risk-based approach can minimize uncertainty. Entities, organizations all need to be agile in responding the shifting risk environment.
Private Investigator & Security Services in Greater Miami, Sunny Isles, Fort Lauderdale, Boca Raton, Weston, Plantation City & Miami Gardens Florida
There are times that an external agency can take a ‘third person’ look and identify risk factors that may not be apparent by internal scrutiny. Advanced Private Investigator & Security of Miami FL can handle all of your investigation and security needs. Contact us today!
