Report highlights common challenges and good practices to overcome risk management difficulties
- Published: Tuesday, 14 May 2019 08:22
A new report by Cass Business School for the ACCA (the Association of Chartered Certified Accountants) uncovers how board-level risk management activities vary in organisations as a result of internal and external factors. The report, ‘Risk and performance: Embedding risk management’, highlights common challenges and good practices to overcome risk management difficulties.
The study combines findings from four in-depth case studies including interviews as well as a review of current academic literature.
The insights were consolidated to create the ‘risk gearbox’, a conceptual model for embedding risk management in organizations. It shows how formal and informal risk management mechanisms combine to create ‘strategic thrust’ to support the board decisions on strategic risk taking and control. There are also a number of recommendations for organizations looking to improve the effectiveness of their risk management arrangements.
Some key recommendations from the report include:
- Effective risk management requires the use of complementary formal and informal mechanisms to achieve strategic objectives.
- Communication is vital between business units and functions, as well as communication to/from the risk management function and internal audit function
- The risk management function has a pivotal role in communication and building risk management relationships.