Managing risks in all areas of your business means taking a comprehensive approach. With New World Norm, nothing will be overlooked, with our expert services including operational risk management
for a wide range of industries.
So, what are the main pillars of operational risk management, and why are they considered so important?
The five pillars of operational risk management are typically agreed to include:
What exactly is operational risk management, and why is it so important?
- Risk identification. It’s vital to not only identify but fully understand the various risks associated with the operations of any business. In order to identify such risks, New World Norm can carry out comprehensive risk assessment, along with services like scenario analysis and an analysis of your historical data in regards to reported incidents. Since it’s easier to record incidents and data than ever before, companies often have a wealth of information to work with.
- Risk assessment and measurements of the reports. Identifying risks is obviously not enough to obviate them. Once risks are identified, they need to be assessed and measured in terms of their potential impact and likelihood of occurrence. This particular step involves quantitative and qualitative analysis to prioritise risks based on their severity and frequency. Fortunately, there’s plenty of technology nowadays to make this an easier process.
- Risk monitoring and control. After assessing the risks at your business, it’s important to continuously monitor them to ensure they remain within acceptable levels. Control measures are put in place to mitigate risks, and monitoring mechanisms are established to detect any changes or emerging risks.
- Risk reporting and communication. The way we communicate risks is crucial for those at the top to understand and manage them appropriately. You want to have a way to report these effectively and communicate vital information to relevant stakeholders, including management and board members.
- Risk governance and oversight. This pillar involves establishing a framework for governance and oversight of operational risks within an organisation. It usually includes defining people’s roles and responsibilities, establishing policies and procedures, and ensuring that there is oversight at any level of your company to manage operational risks effectively.
Operational risk management is described as a discipline within risk management that focuses on ‘identifying, assessing, and mitigating risks associated with the day-to-day operations of an organisation’.
Operational risks can arise from a wide range of sources, including:
There are several primary goals of operational risk management.
- Human error, including those which lead to cybercrime
- System failures
- Technology disruptions
- Legal issues
- Regulatory compliance issues
- External events such as natural disasters.
The first is to identify and assess operational risks which could disrupt or harm your organisation’s operations. One of our risk assessments can include analysing the likelihood and potential impact of every risk we identify.
Once this is done, experts can introduce controls and strategies to reduce the likelihood or impact of these risks. This may involve improving processes, implementing new technologies, enhancing security measures, or developing contingency plans.
Monitoring and reviewing is an important part of risk management.
Operational risk management is an ongoing process that requires regular monitoring and review of the effectiveness of risk controls and mitigation strategies. This includes tracking key risk indicators, evaluating emerging risks, and making adjustments to the risk management framework as needed.
Enjoy first-class reporting and communication from our team.
Exceptional communication is vital for operational risk management. Your organisation needs to communicate information in relation to risks to relevant stakeholders, including senior management, board members, regulators and employees.
Clear reporting mechanisms help ensure that decision-makers have the information they need to make informed decisions about risk management priorities and resource allocation.
Using our experts in operational risk management can help your company minimise the likelihood of disruptions to your operations. We will also work hard to protect your assets and reputation, enabling you to achieve strategic objectives in a safe and secure manner.
With our bespoke consulting services, you’ll always have a team dedicated to strengthening your organisation.
When it comes to operational strategy consulting, New World Norm
has worked across 31 countries and helped implement lasting improvements.
We’ve been in this industry since 1991 and work for both UK-based and international brands. Our team is dedicated to reviewing, developing and implementing security risk management strategies tailored to your business.
Give your investors and stakeholders more confidence.
Demonstrating a commitment to security through regular risk assessments enhances investor and stakeholder confidence. It shows that the organisation is proactive in identifying and addressing potential security threats.
Conducting a security risk assessment can help your company allocate resources effectively. By understanding the most significant risks, they can prioritise investments in security measures that provide the greatest impact in mitigating those risks.
If you’re looking for companies for security risk assessments, simply contact our friendly team for more information.