A Systems Approach to Risk
Heightened standards and significant investments have increased the size and scope of responsibility for risk management. Expansion often is a fertile ground for misunderstandings of risk. Often overlooked as a success factor, risk management is intended to drive growth and act as an enabler of business strategy.
Risk management is a structured, consistent, and continuous process applied across the organization that allows it to better understand and address material risks. Corporate boards, ratings agencies, and regulatory bodies are among the key drivers for advancing risk management. The implementation of a risk management program can facilitate better capital resource allocation decisions, increase operational efficiency, and enhance a company’s risk control efforts to support critical strategic, compliance, and governance initiatives. Bawn can help your organization apply an integrated approach to identifying and assessing business-critical risks, evaluating existing risk management infrastructure elements, and constructing continuous, in-depth risk management processes.
Bawn’s specialists analyze risk from an integrated perspective, exploring risk relationships within your organization to create a more sophisticated understanding of your company’s material risks. Whether your company is just beginning a risk management program or has an established framework in place, Bawn can assist you in your risk management efforts.
Organizations that benefit from Risk Management
Any publicly traded or privately held organization:
- In a highly regulated industry
- Seeking to better understand and mitigate the risks it faces across the entire organization
- Wanting to benchmark and improve existing risk management arrangements
- Looking to coordinate and formalize its risk management efforts across the enterprise
What your Organization will get from Bawn
- A proven process to help you identify and assess material risks, develop specific mitigation strategies, and assess enterprise-wide technology platforms for ongoing monitoring and reporting
- The ability to create a holistic, enterprise-wide risk aware culture, drawing upon Bawn’s expertise in industry issues, risk analysis, analytics, organizational change, and risk technology
Current State/Gap Analysis
When considering the steps necessary to implement risk management framework, it is useful to first identify and compare your organization’s existing capabilities relative to what capabilities management would like to have in place. Bawn provides a current state assessment, as well as a gap analysis against best practice and a benchmarking report.
Risk Identification and Assessment
Risk identification and assessment is a critical framework component. We take a structured approach to assess risks specific to your organization. This includes the collection, identification, categorization, prioritization, and mapping of risks to align with your organization’s business objectives and strategy. The result is a strategic organizational risk map.
Risk analysis enables you to better understand the impact risk has on your organization and your business objectives. Bawn takes a disciplined approach to understanding your risk appetite and developing tolerance thresholds; modeling risks and their variance; providing an analysis of the projected impact of mitigation strategies; assisting you in determining optimal capital allocation; and considering the upside of risk to your business.
A systematic risk management approach calls for the analysis of possible actions taken with respect to each risk—accepting it, managing it, or exploiting it. Moreover, these options typically call for an implementation plan. Bawn offers an evaluation of risk treatment options including the projected costs and benefits; identification of risk ownership; the recommendation of tailored solutions appropriate to your business and objectives; and the implementation of risk mitigation strategies.
Managing risk across the enterprise requires coordination. The information produced by the various businesses and risk management functions in the risk assessment and analysis phases must be disseminated so that the right people are given the right information at the right time to make informed business decisions. Bawn can help you determine the appropriate needs of your business, its management, and key constituents, and assists in the design of meaningful communication processes and materials.
Our comprehensive approach addresses the needs of board members, senior managers, risk managers, and other internal and external stakeholders.
In an effort to sustain risk monitoring and to make risk reporting more efficient, many organizations are turning to technology to support their risk management framework. Bawn works with you to establish principal business requirements; recommends technology and business process solutions; assists you in the development and implementation of a technology infrastructure; and evaluates various software applications.
Framework Design, Implementation, and Reporting
An Enterprise Risk Management framework is used to identify risks across the organization, define the overall risk appetite, and implement the appropriate controls to ensure that the risk appetite is adhered to. This overarching framework puts in place a system of timely reporting and corresponding actions on risk to the board and senior management. Additional risk-specific frameworks address all risks that are being managed.
Instilling a risk-based culture is crucial to realizing the on-going benefits from a risk management program. Bawn works with you to enhance existing processes or create new ones. Activities can include building communication protocols based on a common language for discussing risk; enhancing risk governance frameworks; and integrating risk management activity into your control and compliance framework, strategic planning, and business processes. Bawn also provides you with an implementation roadmap to assist with organizational change.