The Importance of Transparency in Risk Management
Risk managementis about how organization identifies risks, assess all possibilities and threats, and prioritize which one to deal with. That is why it is important to manage effectively those risks before they create unfortunate situations. In this sense, business transparency in every level of organization is a must.
According to Vicky Kubitscheck, chief risk officer & compliance director of Police Mutual Group, transparency goes beyond risk management. Besides, it also affects the reputation of organization. Transparency is the basis of how organization runs its business. By conducting business transparently, a company can achieve their goals in a better way. As a culture of an organization, transparency should be in governance and finance management, as well as in other important parts of the company. By doing that a company can show that it runs the business in the right way and an ethical manner. Bad corporate behavior will cease to exist. As the result, a better business environment can be built.
Applying transparency in all levels of the company allows company’s leader to communicate company’s objectives to all the staffs. In addition, by allowing everyone in the company understands clearly about how the business is being run can make the board and executives decide policies based on accountability and transparency.
Although, it would be hard for companies that are not accustomed to transparency, starting now will not too late. However, transparency needs to be established with the right way, so that all parts of the company will taste the fruit of their transparent business.