Managing risk in line with strategic objectives is every board’s critical role. As risk management function evolves to become a core area of business practice driven by the board, it is important to empower individual staff at the company level to be risk champions in their department. This calls for automated risk management processes and regular trainings of staff.
As part of its core business in transforming agribusiness in Uganda, aBi Trust undertook a training in risk management and board governance to empower the Implementing Partners (IPs). “The evolving dynamics in governance and risk management pose great threat to organizational success. Coupled with the changing global weather patterns, it is our mandate to undertake all IPs from all over the country through this critical training,” noted Andre Dellevoet Group Chief Executive aBi Trust and aBi Finance in his key note speech at the launch of the training at Fairway Hotel Kampala.
Although traditional risks such credit and market remain fundamental considerations, it is important to quantify and assess risks into human capital, reputation and climate change. Combating risk calls for organizational culture. Individual staff should be part of the risk mitigation team rather than having one risk officer in particular.
Risks that can result into shutdown of the organization should be categorised as catastrophic and be micro monitored on a daily basis. Say, if the major revenue income earner for the company is purified juice, it then means that nothing should happen to the plant and machinery.
In risk management, you have three options; avoid the risk, transfer the risk or accept the risk. In this case, for the plant and machinery, the costs of accepting the risks are excessively high. The risk can be transferred onto a third party like an insurance company. This is where the Board has to be at its best in governance.
In practical terms, the major role of the board is risk management and ongoing concern of the business. The board should articulate their desired results to the managing manager. In return, the managing director supervises the team to achieve the results.
“The funding trends are changing. The donors are ready to spend US$1000 for just US$80 missing dollars. This is how tough it is. Taking you through this important training is to ensure we do not fall short of such circumstances.” Noted Rhoda, Senior Risk Manager at aBi Trust.