Lakhasly

This chapter describes the different styles of risk management that are currently practised.The company should see this diversity in its workforce as a benefit that will enable it to perform better in the marketplace by exploring opportunities to produce and publish new magazines that appeal to a more ethnically diverse readership.Having achieved compliance, the publisher should become aware that a signifi- cant proportion of the workforce comes from ethnically diverse backgrounds.As a simple example, a publisher might realize that it was not fully complying with equal opportunities legislation, because there was no ethnic minority representation within the workforce.As the level of sophistication develops, the organization will become aware of the need to comply with obligations and the more general need for improved risk management.The stages of reform to conform to perform represent levels of risk management sophistication.This adds diversity to the development of the risk manage- ment discipline.An organization needs not only to be sophisticated in its approach and expectations of risk management, but also mature in the way it conducts its risk management activities.The company will identify the actions necessary in order to reform its procedures, so that it conforms to legal requirements.The importance of risk maturity is considered in Chapter 24.

This chapter describes the different styles of risk management that are currently practised. More professions and disciplines are now involved in risk management than in previous years. This adds diversity to the development of the risk manage- ment discipline. An organization needs not only to be sophisticated in its approach and expectations of risk management, but also mature in the way it conducts its risk management activities. The importance of risk maturity is considered in Chapter 24.
At first, an organization may be unaware of the legal and contractual obligations that it faces. In that case, it will be necessary to inform the organization of its obliga- tions in relation to the risk. As the level of sophistication develops, the organization will become aware of the need to comply with obligations and the more general need for improved risk management. Once it is aware of obligations, there will be a need for the organization to reform in response to the hazard risks. As the organization responds to the risk, it will seek to conform to the appropriate risk control standards. After this stage, the organization may realize that there are benefits to be obtained from the risk. The organization will then have the ability to perform and view the risk as an opportunity risk, as illustrated in Figure 4.2.
As a simple example, a publisher might realize that it was not fully complying with equal opportunities legislation, because there was no ethnic minority representation within the workforce. The company will identify the actions necessary in order to reform its procedures, so that it conforms to legal requirements.
Having achieved compliance, the publisher should become aware that a signifi- cant proportion of the workforce comes from ethnically diverse backgrounds. The company should see this diversity in its workforce as a benefit that will enable it to perform better in the marketplace by exploring opportunities to produce and publish new magazines that appeal to a more ethnically diverse readership.
The stages of reform to conform to perform represent levels of risk management sophistication. However, it is not necessary for a risk or the practice of risk manage- ment to progress from hazard to control to opportunity. In fact, risks can regress in certain circumstances. At any one time, a particular risk will be of a specific type in an organization. Benefits can be obtained from the successful management of that risk at whatever level of sophistication is appropriate at the time. In summary, risk management need only be as sophisticated as the organization requires in order to bring benefits.