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Elevating risk management to the top of the boardroom agenda: 3 key strategies

The critical role that risk mitigation and management plays in driving organisational resilience, and the importance of building a risk culture within the organisation.

18/03/2024 · 4 minute read

While environmental risks continue to dominate the global risk landscape, as outlined in the 2024 Global Risks Report, unique factors at play in the Middle East are leading business to be most concerned with economic and societal risks. Managing these risks and getting ahead of future disruptions is imperative to achieving the region’s 2030 goals. But, the question remains: how do risk committees effectively position risk management and mitigation as a boardroom agenda priority?

By leveraging three key strategies, risk leaders can demonstrate to their boards the importance of risk management on boardroom agendas. These three areas also highlight risk management as a significant opportunity for growth, profitability, and beyond.

  1. Planning: The first step is establishing synergy between your risk committee and executive leadership to ensure that risk management isn’t siloed. Are you both aligned on what the most urgent risks are in the region, and more granularly across your organisation? Does executive leadership understand how these risks affect their other core objectives?

    Align on how risk management contributes to organisational success

    It can be very difficult to address emerging and systemic risks from a bottom-up approach alone. As a result, the C-suite needs to play an active role in building a risk culture by working closely with risk leaders to understand the unique risk landscape in the Middle East. They can also identify business-specific blind spots and opportunities to address their vulnerabilities, while communicating strategies down the chain of command.

    As a risk professional, it is important to establish the link between risk management and all other organisational objectives, whether those are related to growth, protecting shareholder value, or improving reputation. Without an effective risk management and mitigation strategy in place, these goals are easily threatened. Risk professionals should also reinforce that executives need to get ahead of risks and prioritise their strategy before a crisis hits, so that they don’t have to allocate all their time and resources to remedying a situation when it arises.

  2. Justification: Next risk professionals need to justify why these risks are impacting an organisation’s bottom line. By quantifying the financial impact of risk through risk assessment and analysis, risk leaders can better understand the financial implications of their vulnerabilities and stay compliant with evolving regulatory requirements.

    Quantify the financial impact of risk

    By quantifying the financial impact and specific dollar value of how risks impact an organisation, C-suite leaders can better understand why risk management is a top priority in real-world terms. This also intersects with other key priorities, like financial planning, budgeting, and growth.

    There is also a significant regulatory component to quantifying risk. Increasingly, organisations need to be able to quantify risk to comply with regulatory requirements. With climate-related disclosures on the rise globally, companies that get ahead of pending requirements will be at a competitive advantage.

  3. Implementation: Finally, risk leaders can demonstrate how to begin implementing change and building a risk culture through actionable steps.

Integrate risk management into decision-making

Once leaders have a more holistic understanding of how risk management contributes to organisational success, as well as the financial and regulatory implications of not addressing risks, you can begin advising leaders on how to implement change into daily decision-making processes.

Key takeaways 

Business leaders need to align how they view risk management and its role in organisational success. To achieve this, risk professionals need to demonstrate the financial impact of risk using data, and name actionable ways to address vulnerabilities across the business.  

  • Building a proactive risk culture is essential to the success of any organisation, and a top-down approach is a particularly useful way to do so. 
  • The three strategies outlined can help risk leaders demonstrate to executive leaders why risk management belongs at the boardroom level.

This piece is part of a larger series about the global risk landscape and its impact in the Middle East. To find out more about how risks are impacting risk and business leaders, follow our series.

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