Very few things in the world and in life are certain, except of course for the ‘gruesome twosome – Death and Taxes – who rose to infamy in 1789 at the quill of Benjamin Franklin. Yet just 13 years after a war for independence, there was not a single Head of Governance, Compliance and Risk Management – across the entire 13 American Colonies.

A fact we can be sure of, as if there was, Franklin would have mentioned a 3rd certainty in life.

No one ever drew a crowd, or impressed a blind date, by being the Head of Governance, Compliance and Risk Management  In fact it is the first department to get moved down to the basement when a firm runs short of desks. 

It is always there, never downsized, but also never included on a startup’s pitch deck, or even a footnote in a Steve Job’s keynote.

Until now that is… *cue the gasps and waves of applause*

All of a sudden, businesses around the world, big and small, in every sector – who would never have even talked about Risk assessments in the last – are not just doing them, they are prioritising them!

Risk Assessments and Covid-19

In a nutshell, the pandemic that changed everything and destroyed lives and families, along with the global economy, didn’t actually come as a surprise –  at least, not to a small group of people. It wasn’t a secret either. The fact that Bill Gates gave multiple keynote lectures, at major universities, many years before Covid-19 was first detected in China’s Wuhan province, is also the grain of truth that has since grown and morphed into a wave of conspiracy theories, about vaccines and microchips.

Thankfully for us all, there have been great, dedicated people doing Risk Assessments in the area of global pandemics. Work to model how they would spread, where they might originate from and what we might do to control them. Their work has saved millions of lives, underpins the fastest development and coordinated rollout of a worldwide vaccination campaign in human history.

People looked at the events of our past – they crunched the numbers, made the right decisions and we have all benefited immensely. Innumerate, life-changing rewards from something that until recently, most of us, most businesses, did because they had to. Always with as little enthusiasm, dedicated and company-wide ‘buy-in’ as humanly possible.

This is a stark contrast to what we see today. For any business left standing, but now facing a long road to economic recovery and for every CEO looking to successfully navigate these challenges – there is a clear commitment and focus on improving risk assessments at every level. For many this has meant embracing the latest innovations in both technology and approaches to effective risk assessments, partnering within leading firms like 1RS who are able to provide cost-effective Risk Assessment Software that can scale as they rebuild.

What is a risk assessment?

A risk assessment is a high-level review of a company, looking at areas such as legal risks or health and safety risks. It is typically done at all levels of a business, including a careful examination of hazards that could potentially harm your company, your employees and your customers. Once a risk assessment is completed, the company takes the necessary precautions to prevent damage.

How do risk assessments help a business?

Employers need to protect not only themselves in a legal sense, but also need to protect against a wide range of risks related to their brand, reputation and broader commercial success. 

Managing risks effectively can seem overwhelming and cost-prohibitive for any business, regardless of size and the sector they operate in. Developments in technology mean that new risk assessment software can make a huge difference and help prevent disruption to your company by helping you to focus and prioritise the most important tasks.

What is the purpose of evaluating risk?

The main purpose of a risk assessment is to prevent damage to

  • employees
  • customers
  • the company’s success.

Depending on the industry and the risks and threats it faces, organisations need to take different precautions and implement a range of preventative controls.

Customers should also be taken into consideration when it comes to risks and company threats, especially when using an unregulated financial service which could have the potential to jeopardise their investment.

This is where risk and threat assessment enters the picture.  

Where is risk assessment necessary?

There are a few sectors and situations where risk assessments are especially important:

  • Healthcare
  • IT
  • Construction
  • Cyber security
  • Data and GDPR
  • Consumer appliances and electronics
  • during a crisis, such as the Covid-19 pandemic
  • and many other areas.

This list is in no way complete as every company and industry can benefit from a thorough risk assessment, even if it seems unnecessary. The Covid-19 pandemic has made clear, the unexpected can change scenarios drastically and at any time. A business that thinks there isn’t anything that can slow growth is usually the one that is most in need of a risk assessment. After all, the whole point of a risk assessment is to be prepared and proactive, rather than reactive in the event of unforeseen circumstances that were not planned.

Four reasons why risk assessments matter

#1.  It’s the law.

Risk assessments are essential for any company and organisation, not just large corporations that have hundreds of employees. UK law states that any company with more than five employees has a ‘duty of care’ and legal obligation to conduct regular risk assessments to protect them. This highlights the importance of preventing business hazards even when the business is relatively small.

#2. You stay in control of your processes.

A risk assessment helps you and your company ‘be on top of it’. You are in control of practices and processes, and you are better able to anticipate what’s coming and prevent it from causing damage. Identifying hazards and risks, managing them effectively and putting the correct controls in place results in better overall management of your business and a more cautious evaluation of the environment you operate in.

A cyber attack and a data breach, for example, are very likely to happen to any business and are also extremely preventable. But risk assessment and risk management software – such as the one 1RS provides – are able to assist simple businesses put the correct controls in place.

Risk management allows you to be aware of risks, where they come from and who is handling them in your company. You avoid the ‘it wasn’t me’ and in the end, it wasn’t anyone’s responsibility because everyone thought it was somebody else working on it – it’s a vicious cycle that you need to avoid.

So, when prompt solutions are in place, you are able to fully focus on your business and the tough decisions you have to take. When your internal practices are compliant, regulated, legal and fair the benefits are visible not only to your company but also to your customers. Your business value increases when you, your employees and customers are happy and satisfied.

#3. Brand and Reputation damage.

Damage to your reputation can kill your company instantly. ‘Cancel culture’ is ruthless these days. One scandal can reach global proportions in minutes with the potential to instantly wipe your company from the market, as customers tend to not stay loyal to unethical companies. And all this, because companies neglect risks or are unaware of them.

Everyone remembers Facebook’s 2018 breach of data protection that destroyed the company’s good reputation. And this happened because Facebook neglected their GDPR policies and put the right risk management controls in place. Facebook suffered a massive blow to its reputation as customers were rightfully furious with the company mishandling their data – with even the hashtag #deletefacebook trending on Twitter at some point.

You would think that big companies and organisations are always one step ahead, with risk controls and precautions in place but apparently not so. Facebook is a great example showing the value of a risk assessment to any company.

#4. It’s not just box-ticking.

And it’s not a mundane process that could be done another time. Risk assessment is not a chore and you shouldn’t consider it as something that you could postpone. It is a fundamental part of your business and should be carried out properly and on time.

For instance, following the FCA’s rules and regulations is very important in Fintech authorisation. It is not a box-ticking procedure but a thorough one; it is not boring but an essential one that cannot be postponed either. Any company in the financial services sector must implement a risk assessment framework according to the FCA’s regulations, and be aware of their risk environment to prevent the worst.  

It is also a major liability to big lawsuits. You saw what happened to Facebook because they neglected calculating the risks and were inconsiderate. The lawsuits cost billions and Facebook’s value sank, losing $120 billion in value in the stock market.

Do not also forget that criminal penalties usually follow when governance, risk management and compliance is not implemented correctly. So ask yourself, do you want to get officially penalised because of an error that could have been easily avoided?

What you need to do to manage risks and threats

Risk assessment and precautionary controls are easy to enforce and you’re not alone in this. 1RS supports you from the start all the way till the end, as we’re experts in evaluating your business risks and the market you’re operating in.

And the best part? We’ve made it even easier for all our clients since we can now offer a risk assessment software that can automate processes, easily collect data from anyone in the organisation and provide real-time reporting. 1RS will help you avoid your worst nightmare and understand the worst outcomes to come from your decisions.

All you have to do is put the right measurements in place once, do it right from the beginning and we’ll take care of the rest. Bob’s your uncle.