According to the Bi-Annual Global Risk Management Survey, damage to Brand and Reputation is the number one concern amongst Australian businesses.
The following list reminds us why we need to be vigilant, and ensure we are prepared to see through any difficult situation that may arise.
Top 10 Business Challenges:
|1||Damage to brand or reputation|
|2||Economic slowdown/slow recovery|
|6||Cash flow and liquidity|
|7||Failure to attract or retain top talent|
|8||Failure to innovate / meet customer needs|
|10||Accelerated rates of change in market factors|
The Risk Management landscape today faces new risks as they emerge, for example cyber-attacks are now listed as a major concern. This, coupled with financial losses, are the reputational damages that this type of circumstance can bring.
It is often difficult staying ahead of changing business needs (mostly due to new technologies), however it is now imperative that organisations employ the following four levers to drive internal change:
- Infuse Risk Management into Strategy. Rather than simply managing the risks that have been assumed after the fact, risk management should be an active participant in developing the businesses strategic plans and objectives, and in assessing the impact of new products and markets on its risk profile including its capital and liquidity position.
- Focus on people. Businesses need to ensure they have sufficient professionals with the skills to manage high-risk and complex activities, including addressing non financial risks that are growing in importance such as cyber security risk and conduct risk. To engage employees throughout the organisation, businesses need an active program to create a risk-aware culture that encourages ethical employee behaviour, constructive challenges, appropriate incentives, and transparency.
- Define Responsibility. Businesses should re-examine their current structure to ensure they have clearly defined the risk management responsibilities, have eliminated any overlapping responsibilities, and have enabled business units take full ownership of the risks in their area.
- Leverage emerging technologies. The latest technologies – such as cognitive analytics, machine learning, natural language processing and big data, have the potential to fundamentally transform risk management. In addition to reducing costs through automation, these technologies can also enhance the overall effectiveness of risk management by providing new capabilities such as building controls directly into processes, prioritising areas for testing and monitoring, and identifying potential risk events in real time to allow preventative action to be taken.
If you wish to discuss any of these risks and how it might impact your business, please contact Citycover Insurance Brokers on (07) 3270 1500.