Role of Risk Management Function in Business
10th May 2019
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No matter what business you are in, every industry faces unexpected risk, be it natural disaster or loss of documents or fire or injury to employees or damage to property and all this results in the significant loss to the business. It will not only be the financial loss, but all these factors can affect the operation of the market, and it may result in the permanent closure of the company at times.

A risk management plan can help you to plan for such situations and how to act and react in such circumstances. A risk management plan can also help in saving the cost that you will spend on such an accident and will further help you to keep your business, its employees and the future of both.

What is Risk Management?

Risk Management is a process that allows the owner or owners of the business to know what are the potential risk factors for his or their business and how will they affect the activity or the related people to the company. This allows them to set up a plan to avoid such situations or to be prepared for them or to minimise the effect of such mishappenings. This also allows the management to make the plan which can really help in such situations and which can be quickly followed by the employees.

What should a Risk Management Plan Include?

A perfect risk management plan is a plan which successfully recognises the problem and then finds the most suitable solution for it. The project should not cost much, and it should be easy to understand and should be easy to follow. A costly plan will not be financially effective for the business as it will cost a lot of money and will be a loss for the company. And a program which is time taking or hard to understand is not suitable for the time of crisis, as is in such time people need to act fast and smart.

a)  Risk Identification: -The first and foremost step of risk management is to identify the potential risk which can harm your business or its employees or anything related to business.

b)  Risk Analysis:- Than comes the step, where there is a need to know the impact or effect of the risk on the company. In other words, the intensity of the risk is analysed in this step.

c)   Risk Control:- Risk control comes after identifying and analysing the risk to the business. In this, we decide what measures should be taken towards creating a plan for risk management. And how can we control the situation in the time of any crisis or accident?

d)   Risk Treatment:- Last but not the least step of risk management is risk treatment. In this step, we have to decide to do all the remedies or what all we need to do during the time of an emergency. We have to make sure how will we pay for the financial losses and how will the business recover from it.

An effective Risk Management Plan Include:-

1.)  An effective Risk Management Plan should include the involvement of all the employees, whether they are working on any level in the business because when the crisis comes, it doesn’t affect one group or set of people.

2.)  All the plans regarding the same should be detailed to all the employees thoroughly and accurately so that there is no confusion when they have to apply the strategy or policy.

3.)  Your business should have all the proper tools and a small number for the time of emergency so that one doesn’t look for all this stuff in the end.

4.)  The roles and responsibilities of every member of the business should be, and they must be accountable for the same.

5.)  All the members of the industry should always participate in all the training and drills for risk management.

6.) Employees should be well trained and aware of Health and Safety Regulations. The employer should encourage them to participate in globally recognized Health and Safety training such as IOSH Managing Safely course or NEBOSH.

So the proper Risk Management Plan will not only help the business to avoid such crisis or accident but will also prepare everyone in the company for the same. It will save the valuable time, money, assets, and people with the claims occurring in a lesser number. All this planning will create a safer environment and who doesn’t love to work in a climate that is safe for them.

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