The challenge of meeting government regulations puts businesses at risk to numerous factors that can have a negative impact on financial status and reputation. Keeping up with corporate governance, risk management and legal compliance mandates is much more complex in today’s turbulent economic conditions.
Historically, each area of risk was addressed where the most impact was felt. Risk management processes began in individual departments, such as legal, finance, security, ethics and compliance, internal audit, human resources. Over time the lack of a centralized starting point has led to disparate, duplicative effort and unnecessary spending. In some cases the same issue may be investigated by two departments using different terminology and processes. Important trends and patterns could be easily overlooked because department do not share certain information with another, making it difficult to study overall data.
Financial risk management can lead to clear benefits through cost avoidance, cost containment and time savings. A comprehensive financial risk management program can prevent inefficiency and duplication that reduces unnecessary costs, boosts productivity, and facilitates consistency and communication. A centralized system allows for multiple departments to compile information and collaborate among themselves. This helps improve communication and insight, reduce and contain risk, cut costs and add process consistency. Then, the availability of organization-wide trending and analysis helps to provide focus on the future and potential problems so they are better equipped to handle unstable economic conditions.
Ethics Point. (2011). Healthcare Risk Management Takes a Broader Perspective. Retrieved from http://www.ethicspoint.com/Upload/Articles/Whitepaper_Healthcare_Risk_Management.pdf