Uncertain times mean increased risk. With risk comes opportunity and now is the time to review your approach to risk-based decision making.
In this current financial climate it is key that your approach to decision making is based on a sound understanding of the risk-reward equation. Do I need to act now or should I sit and wait? Do I take an aggressive stance or act conservatively?
For the private sector, if you take on too much risk and the market turns against you more than expected, you end up in financial crisis yourself. Take on too little risk and you may miss out on future growth opportunities or miss a quality asset at a bargain basement price.
For the public sector, with changing policy needs, you may need to act fast with well thought out solutions that mitigate current risk while minimising the likelihood of creating medium or long term systemic risks.
To ensure your risk-based decision making is appropriate for the current environment, ask yourself these questions:
- Have we reconsidered our appetite for risk AND communicated it across management?
- Have we physically congregated and considered the risk and opportunities in front of us and WHEN they are likely to eventuate?
- Do we need to re-align our strategic and operational risk controls to manage risks that are arising now or to monitor potential risks that are on the horizon?
- Is there a need to adjust our approach to risk financing to protect capital for the risks or opportunities we foresee?
If you would like to hear more about RMP’s thoughts on risk based decision making in the current environment, please contact us. Alternatively you might like to run an RMP Healthcheck to assess the maturity of your risk management framework.