Raising your game 5: Risk management

By charity finance expert Paul Leigh

Paul Leigh
Paul Leigh
Risk management is all around us. For example, aircraft engines are designed to be more powerful than necessary just in case one of the other engines fails.

In high-performing finance functions you will often see risk management built into the financial processes, with the result that last-minute fire-fighting behaviour is the exception rather than the norm.

Risk management is often misunderstood. It is not about eradicating risk but mitigating it. The aim of risk management is to identify the key risks, build countermeasures to reduce the chance of the risks becoming reality and put in place contingency plans if they do.

A few tips: Bring risk management alive by asking questions such as "what if ...?"; then build the countermeasures and contingencies into your processes. There is also value in including the topic in your day-to-day conversations. And if something does go wrong, you should review your risk plans and processes to see if there is anything that needs improving.

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