How Can Risk Management Help in COVID-19?
Risk management plays a key role in times of uncertainty and volatility. Organizations with well-developed risk management frameworks can respond and even seize opportunities both in times of crisis and in more stable times.
The risk management field relies on a process that is as relevant during a crisis event as well as when that event stabilizes.
“Globally, individuals and organizations are under extreme pressure and anxiety to deal with the impacts of COVID-19, while at the same time extraordinary decisions are being made and implemented as the situation is very fluid,” Anthony Rossi, Risk Management Specialist and Instructor, York University School of Continuing Studies.
The Risk Management process involves taking into consideration the context or current environment and focuses on identifying risks that align with the organization’s objectives at that time. This includes assessing identified risks, treating risk using various techniques, and most importantly, monitoring and reporting on the implementation of those treatment techniques to the executive team and Board.
Even during a crisis, objectives are set by executive management, or, in the case of COVID-19, upper levels of government. Risk management is practiced in a consulting role, behind the scenes and works in collaboration with industry professionals.
What Risk Management Techniques Have Been Used in COVID-19?
In the early stages of COVID-19, leaders made difficult decisions to contain the spread of the virus. During this time, risk treatment techniques were implemented such as avoidance, with respect to unnecessary travel and closing borders, and risk reduction, including shutting down non-essential businesses and asking citizens to practice social distancing to reduce the spread of the virus. As economies plan to reopen, organizations will need to apply a risk management framework to evaluate the opportunities and risks associated with their reopening plans.
The risk management field will often prioritize risks into different rating levels, as well as organize them into categories that align with an organization’s objectives. Four key risk category areas that are common to organizations and are especially relevant during the pandemic include hazard, operational, financial and strategic risk. Each risk is evaluated in relationship to its potential opportunity and the organization’s appetite for risk.
How Will Risk Management Be Impacted Going Forward?
The unprecedented event of COVID-19 and its impacts will be long lasting. The crisis will be a key subject area in risk management courses and training. The lessons learned will also be implemented across organizations and all level of government. Similar to any large event, a risk management professional can provide a framework for decision making, reducing the level of uncertainty, and ensuring employees remain innovative, which is essential for all organizations if they are to remain relevant.
This shift in utilizing the expertise of a risk management professional has been occurring for some time, however, COVID-19 may increasingly elevate the positioning of a risk management professional to positions of Director, Vice President, and Corporate Risk Officer.
Risk management professionals are lifelong learners. Education and training will continue to evolve and risk management professionals are continually exposed to emerging risk tools and insight to respond to and manage organizational threats as they arise.
Tony Rossi is an instructor in the School of Continuing Studies’ Certificate in Risk Management. He is a risk management industry professional who has practiced in both traditional and enterprise risk management roles within the public sector. Tony’s 20-year career includes implementing an enterprise risk management framework, establishing large self-insured deductible programs, managing claims administration departments, and implementing effective risk control measures. Tony has been teaching risk management courses since 2004 and strives to provide students with a valuable learning experience.
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