Thursday, August 9, 2012

Outsourcing Risk Management Department to Risk Specialist or Firm

Sometime risk management department is outsourced to risk specialist or firm. It assesses risks and provides consultancy services on risk management to organization.


Benefits of Outsourcing Risk Management department to External Risk Specialist

Risk assessment carried out by the external risk specialist or firm would be equally acceptable to all employees because of having independence of external risk specialist firm from organization.

External risk specialist will be stranger to organizational activities and will assess each activity from fresh perspectives.

It increases the credibility of risk assessment in the eyes of employees and other stakeholders if that information is used for external reporting. Credibility in the eyes of employees is important, as they are expected to follow internal control systems established to manage risk identified during the risk assessment process.

Independent risk assessment may help gaining confidence of customer regarding quality of product offered by organization.

Independent risk assessment may assist satisfying government authorities in regulated industries, such as health and safety inspectors in pharmaceutical industry.

In the event of difficulties, organization can transfer the responsibility for risk materialising due to negligent risk assessment to external risk specialist.