Risk management has become increasingly common in companies, to the extent that it is currently considered essential for organisations to prosper and, sometimes, even to survive, in a competitive globalised market, where a lack of foresight regarding adverse situations can prove fatal.
As risk management has become a basic aspect of company activity, its implementation has become increasingly complex. Currently, risk management is not limited to assessing the risks of those company activities that are considered most dangerous or likely to involve a greater number of issues. The current view is much broader and more comprehensive, covering an overall analysis of all the company’s processes: production systems, management, operations, accounting, financial management, tax matters, etc.
Risk management consultancy, often outsourced to a specialised company, is probably the best way to guarantee effective protection, taking all parameters and variables into account and allowing the company to manage risks optimally, prioritising preventive measures so that issues do not even arise.
Why is it important to make use of risk consultancy?
Companies face very diverse risks: legal, operational, technological, reputational, tax-related, etc., which, if not properly addressed, will prevent them from achieving their objectives. This is the most important reason why it is highly advisable to make use of risk consultancy.
There are also other benefits related to risk consultancy:
It allows the company to gain transversal knowledge of processes, threats and the control measures needed.
It provides a comprehensive view of different types of potential risk, especially the way in which they are interrelated.
It helps to enhance the company’s corporate image, both externally (customers, suppliers, partners) and internally (employees and professionals). A company that is concerned about preventing and addressing risks projects a solid, serious, forward-looking brand image, and is seen to be concerned about the health and integrity of its own employees and third parties.
What does risk consultancy consist of and what type of information does it provide?
The main work of risk consultants is the conduct of internal risk management audits. Whether or not the company has its own risk prevention and management department (this is legally required in companies of a certain size, especially in certain sectors), reports based on risk audits provide valuable information on aspects such as:
Determining the main risks faced by a company and the likelihood of them occurring.
Detecting weaknesses and vulnerabilities.
Checking whether the measures established by the organisation to monitor and prevent risks or respond to a crisis are appropriate, proposing new measures or suggesting improved courses of action to deal with any particularly vulnerable points.
Creating, updating and improving risk management strategies, protocols and plans.
Risk and risk-management consultancy
In order to maximise the efficiency and effectiveness of risk control, focusing on prevention and taking appropriate measures to cushion an incident’s effects if it should occur, it is important to combine consultancy work (analysis, audits, plans and measures to deal with risks, etc.) with day-to-day risk management, which involves roles and duties related to employees themselves.
Risk consultancy consists of a methodology for detecting, monitoring and dealing with risks that must subsequently be implemented by the company’s staff. Consultancy is, therefore, the theoretical basis for controlling risk, while risk management could be defined as the implementation of the measures and protocols recommended.
Consultancy and risk management are thus complementary processes and both are necessary for any company to gain control of the variables related to its risks, to define a strategy for preventing and dealing with risks, and to apply it appropriately, correcting and improving it if necessary.