Recognizing the value of responding to risks and reducing vulnerabilities within your organization can provide a foundation for addressing entity-level threats as they emerge. If you respond to threats at the entity level, you can better assure they are mitigated without interruption to your business strategy execution and within the risk-appetite level for your organization.
Find the source of your risk
Entity-level risks can have internal or external origins. They can arise as a result of your business strategy or because of outside events beyond your control, such as increases in prices for materials and supplies. Changes to your customer demographics can also pose a threat to your company’s existing market position and product offerings. In addition, new or revised compliance requirements, as well as changing political and economic conditions around the world can all present risks.
Identify your ‘acceptable’ risk
Effectively responding to entity-level threats requires involvement from your board of directors and senior management, including the CEO, CFO and any other executives who are responsible for managing entity-level risk. Collectively, those individuals must lead your organization in evaluating identified risks, analyzing the potential impact or likelihood of those risks occurring, and determining how any identified vulnerability is adequately covered within the organization’s risk appetite and risk threshold.
To learn more about identifying and managing entity-level risks, view Weaver’s Risk Insights document, Risk, Response and Reduction – Entity. For a discussion specific to your organization, please contact Alyssa Martin or Jody Allred, Weaver partners in risk advisory services.