Preparing Annual Risk Management Strategy ? Yapperz - Speak out ...

Organizations would be to prepare for the risk management strategy and plan for the year 2011, as it is the last quarter of the year, his focus. Normally, Chief Audit Executives, Chief Risk Officer, Head of Internal Audit, Chief Information Security Officer, Head of Compliance, Head of Ethics and Head of Fraud risks are very busy in the last quarter of the year finished off the targets, objectives and key performance indicators. The next year strategy will be Claims Management Software developed from the previous year reports, observations, balanced scorecards and risk dashboards. A simplified risk management strategy focuses on the following:

1) Financials develop a budget and other costs indicators

2) surgical preparation and review audit schedules. List to be prepared and reviewed.

3) formulation of a set of resources and training plan

4) Knowledge of policies, procedures and manuals - develop knowledge bases, research and writing modernize risk management tools and software.

Risk management has in the complex and critical current economic environment. Without demanding qualified risk management departments and organizations, several disaster scenarios facing. Globalization, technology, economic conditions, regulatory agencies, competitors, and speed of change have all contributed in the production of complex operations. Risk management departments need to gear up and develop annual strategic consideration of these aspects in mind.

Five proposals for the development of a comprehensive annual strategy are given below:

1. Break the silo Approach

Depending on the size of the organization, the organization has a number of departments with a focus on risk management. To name a few, as mentioned in relation to the department heads in the first paragraph, we have internal audit, Fraud Prevention & Investigation, Compliance, Information Security and Business Ethics. These departments typically have some overlapping functions, and turf wars. Silos are formed, and the senior management has difficulties to make sense of various risk dashboards and reports to the Department heads.

Prepare individual plans for the departments and roll them up to a combined presented an all-risk management departments. Prepare a single strategy and plan for the organization as a whole in order to present the same to management. Submit a plan to ease the management, the emphasis is on the top risks for the organization, with a plan and control. The management will have greater respect and greater support for the integrated approach. Various risk management departments are also able to take advantage of cost and time to the monitoring of different risks by reducing duplication of efforts, synergies and to store tools and information sharing.

Second Determine risk philosophy and appetite of the organization are

In some cases, the risk management department is a risk dashboard to the senior management of the organization. If the CEO of the company asks, "Can I hold you to that you are absolutely sure that if these top 10 risks are mitigated, the organization is to sail through the year?" But not the head of a rule, a say a definitive "yes." The answer is probably a given, but if so, not a "yes". So the question is how this should be a department head concern.

Risk Manager to have the risk appetite and philosophy set by the organization to address. To assess the risk philosophy, understand the organization's culture and environment. The way business is conducted daily, and the strategy of the organization are good indicators for the risk to find philosophy. Assess whether an aggressive or conservative fiscal stance on risks to the achievement of business objectives goals.

Risk appetite has is the level of risk the organization is willing to take, to make business activities. Ask a simple question to the board members would be - "How much is going to make you uncomfortable when it appears in the newspaper business?" Consolidation of the risks of the various risks identified by the risk departments and present them to the Board. Finally, if the company is the internal view of philosophy and risk appetite in line with the views of the Board and other stakeholders. Align the two when preparing the annual strategy.

Third Understand and integrate with business Strategy

In a few companies are drawn to the annual business plans and strategies and risk management in parallel, with no information to what the other plans. The risk management strategy can not focus internally department. The danger, department heads need to understand information about the company's business strategy, strategic risks.

For as receive information on new products and services that the organization will be introduced next year to. Identify the territory, branches, and states that the organization plans to expand his business is. Determine what his risks of expansion and innovation. Let's say a U.S. company is planning to introduce their products in India. Now India has different laws, regulations and taxes. The operational risks are different. Understand these risks and integrate them into the annual strategy and planning. In this way, neither the department nor the risk management business units will be surprised. The budgets and schedules would be included and be approved before the year begins, so there will be limited to fire fighting.

4th Focus on building relationships

One the grouse who have risk departments is that they are not on CXO-radar, have no direct reporting to the beginning or representation on the board and will be of critical business processes due to negative perceptions.

Plan forced to the sidelines next year and prepare a wish list. Add in the time of CEO and other CXO required education and membership in jeopardy Oversight Committee, a new organizational structure with the head directly to the CEO and a nomination for the board. Discuss these issues with the CEO and senior management for plan preparation. This will ensure that management plans to the requirements in their plans. Insist that the CEO is risk management as one of the points in his / her personal balance scorecard. This will ensure he / she is dedicated and committed to risk management across year.

Discuss the composition of the risk monitoring and the audit committee. Identify to nominate the members you wish to support risk management initiatives. Define the process of reporting to the Board and the Audit Committee. Get their commitment to the appointment of board members and new organizational structure for risk management departments. Start the foundation for building relationships in the planning phase.

5th Participants assess Strategies

The risk departments are usually happy with what they do and to discover information about tools and methods from various institutes journals, magazines and conferences. In a few cases, there is some focus on the operations of risk management departments of companies and organizations are competing, the competition organizations.

Determine for the company in terms of products and services in different areas. Concentrate on finding information on the risk management department operations of these organizations. Find out what risks the company faces as they were disarmed, what kind of tools and knowledge databases they use, what are the staff strength and the expertise and the organizational structure. If some of the practices leading to cost savings and better synergies within the company? Determine the similarities and differences, and can assess what needs to be incorporated effectively into your business. There are some lessons to be learned from successes and failures of competitors. Use knowledge competition in order to learn these lessons.

The above five points are those which can be easily integrated to prepare a comprehensive annual strategy. There are a few other things that can look into the risk management departments. Some of them are the establishment of the ERM, risk management, building brand, the application of collective intelligence etc.

A single line would be advice, look at the bigger picture and to question the status quo. Put on your thinking hats and prepare a new strategy. I wish you all the best for the preparation of the annual strategy.

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