What is risk? And why does it matter to my organisation? These are some questions that you might find yourself asking as you tune in to the latest news broadcast about another corporate folding, or another PR disaster causing a brand’s share value to fall through the floor.
Like it or not, risk is a difficult topic to avoid. Especially in the current climate of economic issues, including the unending uncertainty around Brexit and the challenges around security of supply chain; disruption associated with technology, social media and data privacy; ongoing political instability, and ensuing market volatility.
Risk is an inherent part of growing your business and delivering organisational success today. Good risk management and governance, although possibly not the most exciting of topics, do help to keep the taps running and the lights on. But, what do I mean by that? I mean that by keeping a close eye on the current and future risks to your organisation, and knowing your organisation’s appetite and tolerance towards risk, you are already in a good position to manage these effectively. In doing so, you are protecting the interests of your organisation and its stakeholders, be they; your employees; shareholders; the board; or your sponsors, whilst looking after the bottom line.
Risk can be defined in various forms, such as what would commonly be referred to as financial risk, in terms of the opportunity for financial loss resulting from a course of action undertaken. For instance, who could forget the risk taking and the crash of 2008, which lead to greater regulation in the banking industry. Another risk we would commonly refer to is compliance risk, that is, key regulation in relation to, for example, new corporate tax requirements, or indeed compliance with data privacy regulation in the form of the likes of the General Data privacy Regulation (GDPR) which landed in 2018.
What is clear is that risk needs to be understood and managed effectively. But often, some key organisational risks are bumped to the bottom of the agenda. One such risk, which is of growing criticality, is that relating to talent risk. That is, the risk of your business faltering due to an absent succession plan, a constraint in your talent pipeline, or a lack of board effectiveness. That said, we are seeing this come to the fore with Brexit imminent, and with our clients in sectors such as manufacturing, agri-food and hospitality concerned with how they will meet production if their talent supply from the EU is restricted following Brexit.
Consequently, it is important for your organisation to consider some key questions; what does your talent supply chain look like? How do you manage your talent risk moving forward, and how do protect your organisation’s value over the long term?
For more information on how Grant Thornton can help please contact email@example.com