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In any business organization there is need for risk management. The primary objective of risk management is to ensure protection again litigation. Therefore there is need for some best practices in order to avoid hazards, accidents, misunderstandings amongst workers and key personnel as well as customers. There are many consequences of slacking in best practices for risk management which include building up of stress in the working environment. This results in disruptions and downward movement of the institution’s performance. Therefore here are some best practices for risk management.

• Use of professional contract agreements: It is important to ensure that no work is done without a proper contract agreement. This will assist in defining the scope of services and terms of remuneration before one commences work on the assignment. When there are no defined agreements there are greater chances of misunderstandings and controversies to arise over time.
• Systematic Documentation: The main advantage of proper documentation that it facilitates tracking of changes. It is a best practice to ensure that the customers are satisfied and services are delivered according to requirements. If customers claim there are deviations from the agreements, documentation can clear any misunderstandings. Additionally, ensure that all changes are evaluated and signed-off for best practices and there are defenses against litigation.
• Reviewing Work Done: There are serious consequences when business organizations are detected with errors in records. In some cases they can be taken as reason to suspect malpractice and failure to check work productivity. Therefore designated personnel must ensure best practices and see that the assignments agreed upon are completed appropriately and there are no mistakes.
• Communication: Most common problems faced in business institutions are disgruntled customers. This happens when they do not understand the agreement or find services dissatisfactory due to lapses in the administration. In the interest of the financial institutions and business institutions it is an important best practice to ensure proper communication at every level. The administration must be aware of all necessary policies, changes and instructions regarding various processes. Therefore, maintaining a friendly and cooperative customer to employee and employer to employee relationship is necessary. This best practice will ensure proper working environments and better customer satisfaction through improvements.
• Early Resolution of Disputes: It is a best practice to be able to detect risk of disputes and sensitive issue before they get out of hand. Settling disputes at their early stages is an important solution for risk management. As mentioned above the aim of risk management is to avoid litigation. Thus clearing any misunderstandings, annoyances and complaints sooner is a recommended best practice.
• Professional Indemnity Insurance Policy: Having an up to date professional indemnity insurance policy is an important best practice. This will help business and financial institutions in protecting themselves against legal actions just in case. Therefore, ensure that the professional indemnity insurance policy relevant to the respective professionals involved is available.

There is need for risk management in all forms of businesses whether they are financial or health related. Being liable to legal action is an avoidable situation and must therefore be handled in accordance with best practices.

Further reading: Corporate Governance | Audit | Performance Improvement