The importance of communication in risk managementJuly 24, 2019
Risk managers might not be in charge of making the actual decisions regarding whether something should or shouldn’t be done at a business, but they are crucial in the decision-making process. Their role is to offer insight and advice that minimizes overall risk while maximizing overall value to the business and organization stakeholders.
A risk manager’s job is to evaluate risks, of course – but communication of these findings to board members, senior management and others is crucial. In fact, without effective and thorough communication, a risk manager’s role is worthless to a business. Without effective communication that helps stakeholders understand the output and consequences of certain actions, an organization will almost certainly undergo more harm than good. In fact, most business crises are not linked to a lack of information or understanding but a failure to effectively communicate risk.
What does effective risk communication look like?
- explaining the chance of a risk playing out a certain way and what the business impact will be in the scenario
- outlining the difference between risk (which is dependent on certain scenarios) and hazard (found within a specific area)
- helping to deal with fears and uncertainties around certain risk elements
- managing expectations around long-term and short-term risk impact
- improving the overall comprehension of risk-based terminology and concepts to ensure better understanding
- educating managers about risk management decisions impacting every level of business
- creating a culture of transparency that enables concerns to be addressed and questions answered
- growing risk-management credibility through training, continued education and consistent, relevant communication
- dealing with potentially conflicting interests of various stakeholders and all affected parties
Our business takes risks seriously. We can help you establish the risk management plan that’s right for you and take the appropriate steps to stay insured against potential business hazards. Get in touch with us today to find out more.This entry was posted in Uncategorized. Bookmark the permalink. ← What is directors and officers insurance? Do you know the risks? →