14 risk management Managing business risks


Managing risk is a high priority for businesses. Baker Tilly’s Outlook survey recently revealed that over 40% of businesses had introduced new risk procedures, but worryingly 53% hadn’t, writes Mike Blain, Basingstoke office managing partner, Baker Tilly


Much business failure comes about because management doesn’t understand the risks the business was taking, and have been slow to adapt to the current business environment.


The dilemma for businesses is that taking risk is an inherent part of what they do. The economic climate often means higher levels of risk – to use a sailing analogy, it’s the balance of sail size to wind speed. Get it right you win the race, get it wrong and it’s an early bath.


Risk management should be a top down process where the board is responsible for determining the extent of significant risk the business needs to achieve its objectives.


All business should have a clear and current risk management process, but many risk procedures are biased to operational risks and fail to identify wider strategic risks.


There are a number of building blocks to developing risk management:


• Identify the risks associated with the business' strategic actions, understanding both the upside and downside. From this the board needs to


entrepreneurs


Breakthrough live event celebrates entrepreneurship


Santander's event for local smaller businesses to celebrate entrepreneurship and higher education was held in November at Said Business School, part of the University of Oxford – one of Santander Universities’ higher education partners.


Around 100 local businesses from across Oxfordshire and the Thames Valley region attended the Breakthrough Live event and heard experienced entrepreneur Paul Lindley’s story about how he founded and grew his organic baby food business, Ella’s Kitchen, and his tips on the simple strategies that can be adopted to accelerate business growth.


The event is part of Santander’s Breakthrough programme, which provides support, such as growth capital finance, trade missions and business masterclasses, to help more companies achieve their expansion plans to help boost job creation and economic growth.


www.businessmag.co.uk


As part of the day, Santander UK’s CEO Ana Botín also gave a lecture to students on the importance of enterprise to the UK economy and the vital role universities play in promoting the advantages of entrepreneurship to students and helping them to develop new ideas that will eventually become successful businesses.


Santander Universities' global division has been collaborating with the University of Oxford since 2007 and in 2012 provided £392,000 funding for post- and under- graduate scholarships and mobility awards. It is also working in partnership with the University to fund 11 paid internships with local SMEs in a new initiative to encourage entrepreneurialism amongst recent graduates and final year students and promote the benefits of working for a SME.


The programme is a collaboration between Santander Universities and the University of Oxford and provides smaller businesses


with an injection of talent not always easy to obtain by companies with limited administration resources.


Santander works with its partner universities, like Oxford, to find students and companies which will benefit most from the scheme and helps with placement and administration, including project management, as well as funding a basic salary for the students.


Local case study: DFx


Oxford-based DFx, which manufactures industrial control, communications and lighting equipment, recently attended a Breakthrough masterclass at Saatchi & Saatchi. It received advice on brand development and creating a marketing and communications strategy.


Charles Wyn-Davies, marketing manager at DFx, said: “Taking part in the Breakthrough Masterclass was a fantastic opportunity to learn from those who have a wealth of experience and knowledge in making a business stand out from the crowd. I am in no doubt that by following the marketing and communications suggestions given on the day I will see a marked increase in my company’s brand awareness.”


THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER 12/JANUARY 13


decide the level of risk the business is prepared to take, taking into account that there will be many risks and levels of risk appetite.


• Risk management will include a detailed assessment of business risk, as well as identifying, describing and estimating the nature and impact of risks across all elements of the organisation. It will also take into account other issues that may have an impact such as economic, political and regulatory factors.


• Once risks have been identified, the options available to managing them need to be considered and reduced to an acceptable level. For example, a contractual risk might be managed by insurance, renegotiation or even subcontracting elements to a third party and passing the risk on.


• A reporting and monitoring process will ensure that risks are actively managed and evolve with the business. The environment that businesses operate in is continually changing, so a risk management process needs to be dynamic and evolve in line with this.


• Risk management must be led, and seen to be led, at board level, and businesses need to develop


a clear culture of risk management where all levels of people need to understand the overall risk approach and their role in achieving it.


• Risk management is a cornerstone of managing a successful business. A dynamic and board-led approach with a strong culture of risk awareness throughout the organisation as vital in the current economic climate.


Details: Mike Blain 01256-486800


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60