How To Assess Emerging Risks—And How To Respond

19 Aug 2021 2:30 PM | Brett Jeffery, CAE (Administrator)

Integrating risk management into your association’s culture will help you work smarter as your drive toward your mission.

Accomplishing bigger goals with increased efficiency often means taking a risk on new technology, processes or people. It would be great if your association could know the result of every strategic choice in advance. But your association’s strategic documents aren’t a choose-your-own-adventure book you can replay a dozen ways. Assessing your association’s risk tolerance as business and social risks evolve is essential.

First, you must understand your industry’s regulatory and operational landscape. Some industries can tolerate more experimentation. Others, such as healthcare or finance, cannot. Know how innovatively and quickly you can ethically respond as you assess your risk tolerance.

Next, examine the complexity of your organizational structure. How many divergent teams or systems does your association have? The more interconnected your departments or networks, the more likely an adverse event—even a small one—will affect some or all of your association’s operations. Your association’s risk threshold decreases as your departments’ and initiatives’ dependencies increase.

Closely examine how your teams operate. Emerging risks magnify weak or corrupt roles and processes in your organization, in addition to causing other issues. Correct any off-brand practices according to your strategic plan. Your association will tolerate disruptive change better if there are no unacceptable association practices covertly happening.

Observe who makes decisions about risk and reaction. Many organizations have a risk assessment board that regularly meets to review risk factors and plans. Empower everyone in your association—from volunteers to board members—to raise potential risk issues and be taken seriously. The more agile your association is about risk, the more effectively you can respond.

Resolver suggests a few tools for assessing your association’s risk appetite:

  • Know which risk categories would impact your association the most. Prioritize your planned response(s) to them.
  • Set Key Risk Indicators (KRIs) specific to your industry and goals.
  • Create and follow a risk management framework. This document lays out your risk appetite statement, plus who is tasked with responding and how.
  • Integrate risk management into every strategic or operational discussion. Make risk management part of your association’s culture and internal education.

“We all want to work smarter and drive toward our mission,” says Annette Homan, COO for RIMS. “Defining your risk appetite and tolerance—how much adversity your organization can concede—will prepare your teams to quickly adapt to changes.” Associations can choose their adventures just once, but if those choices are made in a risk-tolerant, innovation-minded way, once is enough.

Originally posted here

The Australasian Society of Association Executives (AuSAE)

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