Include risk management in your strategy
What you need to know:
Managers should apply techniques and tools that include brainstorming during which they assess the risks that could impact their business.
Failing to ensure your corporate strategy complies with all laws and regulations such as the Uganda Revenue Authority digital tax, the UNBS Q mark among other regulations increases chances of your business getting either sued in courts of law, paying heavy fines or getting closed. Part of business risk management involves making sure your company minimises its legal exposure by following the regulators laws and regulations.
Many companies quietly experience catastrophic losses such as losing their market share due to failure to predict the risks. The failure to adequately evaluate, prevent and minimise damage from business risks can ruin your company entirely, others go into unplanned for expansion programmes resulting into serious negative financial implications.
Failure to build risk management into your company can signal a lax attitude. That lax attitude could be tempting and impossible to ignore for unscrupulous employees hence the increasing number of theft cases in different companies.
Risk management encompasses the identification, analysis, and response to risk factors that form part of the life of a business. Effective risk management means attempting to control, as much as possible, future outcomes by acting proactively rather than reactively. Therefore, effective risk management can reduce both the possibility of a risk occurring and its potential impact.
Risk management can be addressed by introducing a risk management framework that must introduce a systematic and planned approach to risks, determine accountability for risk management and clarify governance.
Effective risk management involves the identification, assessment, and prioritisation of risks or uncertainties followed up by minimising, monitoring and controlling the impact of risk realities or enhancing the opportunity potential by applying coordinated and economical resources.
There are three types of risk control that include preventative, detective, and corrective.
An investor should develop a corporate strategy that transfers the risks, for example, to insurance companies and those that reduce effects such as mitigation measures.
Risk management is the role of the Board of Directors or Trustees or the investor. The Board usually delegates this role to management. Most companies appoints a risk officer or department but all members of staff have a role to play in risk management.
There is need for the managers to apply techniques and tools that include brainstorming during which you assess the risks that could impact your business.
Other techniques include assessing strengths, weaknesses, opportunities and threats, maintaining and updating a risk register, risk data quality assessment, tracking risks and holding meetings.
Adopting a risk management framework enhances your company’s business growth. This has helped many companies to participate and benefit from the Top 100 mid-sized companies’ survey.
The survey that has been conducted since 2009, is an initiative of KPMG and the Nation Media Group represented by Daily Monitor in Uganda. Due to its contribution to business growth, Uganda Investment Authority (UIA), DFCU bank and ICEA group also sponsor the activity. The survey identifies Uganda’s fastest growing medium sized companies to showcase business excellence and highlight some of the country’s most successful entrepreneurship stories.
As a result of the survey, more than 1,500 SMEs have been trained in taxation, marketing, stock exchange, financing, insurance among others. Uganda Investment Authority also provides information on investment opportunities and the available incentives for both local and foreign investors.
However, your company can only participate if it has got a turnover of between Shs360 million to Shs25 billion, with a three year audited financial track record. It must not be listed on a stock exchange and must not be a bank or an insurance company.
RISK MANAGEMENT
Top 100 survey
Adopting a risk management framework enhances your company’s business growth. This has helped many companies to participate and benefit from the Top 100 mid-sized companies’ survey.
The author is a media relations officer at Uganda Investment Authority.
