All About It Policies And Procedures

Companies and other organisations can identify risks and take action to lessen their effects by using a risk management policy statement. While though the financial risks to a corporation are frequently the centre of a risk policy statement, the types of risks included can vary greatly and may also include the risk of harm, accidents, and legal liability.

Scope of Risk Management Policy

It policies procedures organisation is susceptible to hazards from all sides. There are internal dangers including theft, mishaps, and labour unrest. Natural disasters and pandemics, environmental problems like global climate change, and stakeholder reactions like litigation or boycotts are all examples of external risks.

The laboratory services and certification company ALS Global, which issued a 14-page risk management policy statement, provides some useful insights into the comprehensiveness of risk policies. The framework established by the organisation establishes a procedure to assess risks over a 5x5 grid, evaluating both severity and effects.

Importance

Following the guidelines established by industry groups, internal business policies, and government legislation is a significant portion of corporate risk management effort.

Financial regulations are very important here. Many corporations must file financial reports to the Securities and Exchange Commission and conform to accounting requirements. Numerous other financial restrictions exist involving insider trading prohibitions, financial advisor licencing, anti-corruption policies and much more. According to the Thales Group, banks are required to follow "know your customer" and "anti-money laundering" (KYC/AML) regulations intended to stop the illegitimate use of funds to support, for instance, terrorism or drug trafficking.

In addition to financial regulations, there are many other sectors that must follow them, including employee safety, toxic waste management, etc. The fact that these regulations vary from state to state and country to country makes it much more difficult for an organisation to comply with them. A corporate risk management policy aids in coordinating this effort across the entire organisation.