I’ve been speaking to a range of people recently about how to drive accountability for risk management across organisations. More on this coming – watch this space. Interestingly however is sometimes creating accountability starts bottom-up and not top-down.
One of the reasons I get asked to help with risk appetite statements is because middle management is asking for clarity on the board and executive’s appetite for risk in certain areas of the business. They are unsure. Senior leadership needs to respond which leads to creation of a RAS and, if done well and operationalised, leads to a whole new level of accountability at the top and throughout the organisation. Here is an example.
Last year I had a birthday bash to celebrate 20 years of my consulting practice. I invited a few past clients to be interviewed to put a light on some of the lessons I have learnt about risk management over the years. My greatest thanks to each of them for their willingness to share their story.
One of my clients was Val King. We spoke about risk appetite and the work we did together when she was at a water utility a few years ago. The first part of our conversation was about the why and the what of risk appetite (check out a clip of our conversation here). The second part was Val explaining the practical implications of embedding appetite into the business.
She spoke about the “a-ha!” moments, when the engineers had tangible guidance that guided their decisions on maintenance schedules and linked the business continuity management framework to decision making on building redundancy into systems. You can check out that part of our chat here.
If you want to know more about my thoughts on risk appetite, download my whitepaper or, better still, buy my book, Risky Business: How Successful Organisations Embrace Uncertainty, and gain access to my latest risk appetite templates.