An overwhelming majority of companies have risk management plans that haven’t been updated since they were first written. If you’re on the fence about whether or not your firm needs to do a complete review, check out these five factors. Going over the plan is never a bad idea anyway, so you’ll probably want to do so regardless of how old it is.
1. New Tools Become Available
All risk management plans were written based on human predictions for the longest time. Information technology departments can now invest in powerful digital decision analytic tools that enable them to make much better assumptions about the future. These leverage the power of artificial intelligence and machine learning to figure out the odds of any specific type of malady occurring. Whenever an organization has the opportunity to invest in one of these new tools, they’ll want to review their risk management plan so they can be sure that it’s based on the most accurate data possible.
2. Nobody Knows When It Was Last Reviewed
Even without looking, the fact that you have to ask whether or not a company’s risk management plan is outdated is a good sign that it is. Take some time to look over the risk profile now while it’s fresh in your mind. Get everyone together from your team to share ideas about a new one, and you might even find they come up with creative solutions to a number of related problems, too. Firms that have recently experienced a buyout will also want to take a look at any risk management plans they’ve inherited from another brand.
3. Staffers Have Shifted Focus
Financial transactions, software development, and many other business activities all come with their own sets of risks. There’s no such thing as a one-size-fits-all plan. Any company that’s starting to shift gears and explore other avenues is going to naturally run into a situation where their plan no longer makes sense since it was written based on a different set of priorities. A good rule of thumb is to check the policy every single time a department decides to break ground on a new major project.
4. Regulations Have Changed
Insurance underwriters and public sector regulatory bodies both have sets of rules that their clients have to abide by. When these rules change, you need to look over your risk management plan and see if it still complies with every single list item. You may have to make several massive changes so you don’t fall afoul of any of the groups that impose these rules. If your firm does business in a high-risk environment, then you’ll probably have to pay close attention to legislative challenges as well. These come in and out of fashion each time major movements happen on the financial markets, so it’s important to be prepared.
5. Personnel Have Left Or Come Onboard
Whenever companies experience a huge shift in the number of people they have working for them, they’ll want to review their risk management plans. It’s a good idea to do so even if the plan has recently received a few updates, since this gives everyone a chance to acquaint themselves with how the policy works. Some firms have even found that this is a great time for individuals to meet one another.
Few people like to update their risk assessments, but doing so today could potentially save a great deal of heartache in an uncertain future.
