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10 Business Risk Considerations

Question: What is a risk?  
Answer: It is simply the chance that something could go wrong.

Use this opportunity to score your business out of 5 in the following areas. How well did you do?

(1) Poor (2) Below Average (3) Average (4) Above Average (5) Excellent
  1. Risk Assessment
    How well do we identify, measure and document the threats/risks that could impact on the achievement of our business objectives?
     
  2. Control Assessment
    How well and how often do we re-evaluate the effectiveness of our control framework?
     
  3. Control Cost
    How good are we at identifying opportunities to eliminate cost controls while still maintaining an acceptable residual risk level at a lower overall cost?
     
  4. Risk Testing the Future
    How good are we at documenting and evaluating risks when making important business decisions, launching new products / services and preparing strategic business plans?
     
  5. Planning for Serious Risk Situations
    Do we have contingency plans in place to deal with potentially high risk but low probability situations that could cripple business units or the  organisation?

    Do we periodically revisit these plans to reassess their adequacy?
     
  6. Worst Case Scenarios
    How good are we at considering the possibility of high risk situations which, if they occurred together, could have a devastating impact on the organisation?
     
  7. Early Warning Systems
    How good are we at regularly monitoring our risk status using early warning signs that indicates changes might be needed to controls and/or objectives?
     
  8. Risk Transfer / Financing
    How effective are we at identifying risk sharing and secure options to avoid or reduce the consequences of specific threats / risks to the core business activities?
     
  9. Regular Re-evaluation
    How effective is our corporate process to periodically reassess the acceptability of risk acceptance decisions?
     
  10. Oversight process
    How well briefed are senior management and the Board of Directors on major risks the organisation faces? Have they taken steps to ensure business units are identifying, measuring and controlling and monitoring significant risks?