Steps in the Development and Implementation of a Risk Management Program

Risk management plays a key role in dealing with challenges that can affect the achievement of organizational goals. The process of developing and implementing an effective risk management program requires a careful and planned set of steps.

STAGE 1: Support from senior management

Develop a philosophy and awareness of organizing risk management at senior levels of management. This may be facilitated by training, education, and briefs from management executives.

• Ongoing active support from the Executive Chairman of an organization is essential.
• A senior executive manager needs to provide support to workers to take the initiative to implement risk management.
• All senior executives should give their full support.

STAGE 2: Development of organizational policy

Development and documentation of corporate policies and a framework for managing risk, containing information such as:

• Policy objectivity and rationale for managing risk
• The relationship between organizational policies and strategies/corporate plans
• The extent or extent of the issues contained in a policy
• Leaders are expected to be role models
• Division of responsibility in risk management

STAGE 3: Regulatory Communication

Purpose:

• Increase awareness of risk management.
• Communicate to the lowest level of the organization about risk management and organizational regulations.
• Recruit risk management experts, for example consultants.
• Develop expertise to the lowest staff with education and training.
• Ensure the implementation of a reward and sanction system.

STAGE 4: Risk Management at the Organizational Level

Arrangements at the lowest organizational level in applying the risk management system. The risk management process will integrate with the planning strategy and management process of the organization as a whole. This will involve the following documenting techniques:

• Organization and context of risk management
• Identify risks for the organization
• Analysis and Evaluation of existing risks
• Risk control
• Monitoring mechanism and program review
• Awareness-raising strategies with training and education methods

STAGE 5: Risk Handling

Risk control through program activity plans and team levels. At this stage, it is necessary to develop a program for risk control in each section and area of the organization.

STAGE 6: Monitoring and Re-Review

The development and implementation of each stage of risk management needs to be monitored to ensure the creation of risk management optimization. This activity also aims to ensure that the implementation of risk management remains in line with company policy. It should also be understood that risk is something that can change over time (dynamic, not static) and a review of the steps taken is important. In essence, this monitoring and review activity will ensure the effectiveness and efficiency of risk management implementation to run optimally.

With the appropriate stages, it is expected that the development and implementation of risk management programs can describe the risks that may occur in the company, so that the prevention that will be carried out will be more precise and there will be no work accidents in the company and company goals can be achieved.