An Introduction to Flow Charts for the Risk Management Process
Risk Management flow charts, or workflows, outline the specific and detailed activities or work steps that are required to carry out various processes within the risk management function. More specifically, flow charts and process models can be used to standardize risk assessment (i.e., identification methods, criteria, reporting, etc.), incident resolution and risk mitigation techniques.
![Contact OpsDog](/assets/img/ads/full.png)
Let us take your KPIs & business intelligence efforts to the top.
Contact us now to discuss a BI engagement with OpsDog.
Contact OpsDogAdopting Flow Charts and Workflows for Risk Management Process Improvement
The advantages or benefits of adopting process models or flow charts for the risk management process can be realized in a number of ways, including speedier and more effective risk/incident resolution, decrease in litigation expenses and improved public relations, among other things. Here are some specific ways that flow charts can be applied to risk management processes to improve overall risk aversion within the organization:
Develop Process for Monitoring of Identified Risks: After risks have been identified, implement standard processes for risk analysis, monitoring and reporting. Use flow charts to help dictate the frequency, contents and format of risk tracking reports.
Use Workflows to Assign an Owner to the Identified Risk: Use different attributes of identified risks (i.e., legal, financial, reputational, magnitude of risk, etc.) to assign ownership of those risks. Once a risk is identified detail the steps that need to be taken in order to figure out who is best suited to mitigate and monitor that risk. The quicker a risk is assigned to an employee/department, the sooner the risk can be dealt with and mitigated.
Create Processes & Workflows for Corporate Policy Approval: Document and map out the processes that show the path of new corporate policy, from the time a policy is proposed until the time it is approved and put into effect. Having defined steps for the new policy process will reduce policy implementation costs, expedite implementation times and allow for the identification of bottlenecks along the way.
Different Aspects of the Risk Management Process
Proactive risk management is an essential component of just about every business and every department within a business. While risk management can vary considerably across industries (i.e., risk management for a construction company would be much different from an insurance or consumer finance company), the high-level risks that companies face are usually similar:
Financial Risks: Financial risks can stem from a number of financial decision such as poor debt leverage ratios, poor liquidity, extending credit to underqualified borrowers, high customer concentration or numerous other factors. Process models and flow charts can be used when analyzing or deciding which financial risks are acceptable and which risks should be averted.
Strategic Risks: Strategic risks are typically derived from external factors such as the economic or political environment, new competitors or threats, etc. Strategic risks can also involve mergers or acquisitions into new verticals. Use training process models to ensure employees are educated and compliant with all strategic risk assessment standards and protocols.
Operational Risks: Operational risks arise from internal processes, employees or controls that can expose the company to further financial, legal or reputational risk. Use flow charts to map out internal audit procedures to help make internal audits more effective which, in turn, can help to assess and reduce operational risk.
Select an industry.
-
Support Group Operations
-- 344Finance
- 245Human Resources
- 230Information Technology
- 372Marketing
- 70Legal
- 93Compliance
- 165Shared Services
- 16Risk Management
-
General Line Groups
-- 150Call Center
- 150Customer Service
- 162Product Development
- 102Collections
- 300Sales
-
Supply Chain Operations
- -
Financial Services
-- 966Banking
- 229Insurance
- 130Mortgage Lending
- 428Investment Management
- 445Broker Dealer
- 235Consumer Finance
-
Healthcare
- -
Other Services
-- 118Utilities
- 65Print Publishing
- 68Broadcast Media
- 263Advertising
- 90Retail
![Contact OpsDog](/assets/img/ads/full.png)
Let us take your KPIs & business intelligence efforts to the top.