By Rob Joseph, Director, BeaconCFO Plus
The CFO wears many hats and among them is serving as the first line of defense against risk for your organization. Risk can mean something different for every company—as Warren Buffett famously said, “Risk comes from not knowing what you’re doing.”
Knowing what you’re doing begins with having a strategic plan in place for your business that incorporates risk management.
U.S. Bank surveyed 750 finance leaders about business risks in the fall of 2022. Only 15 percent reported that they are “very confident in their ability to manage talent, digital disruption, and inflation worries.” That means the majority of businesses do not feel adequately prepared to navigate some of the biggest risks facing organizations today. The good news is that more business leaders are acknowledging the importance of risk management: Thirty percent of executives cited risk identification and mitigation as a top priority in 2022, up from 18 percent in 2021.
Our goal as fractional CFOs is to position your organization to manage risks, including:
- Liquidity (cash flow)
- Mergers and acquisitions
- Operational (process, personnel, supply chain)
- IT (contract, security)
What begins as an operational risk can rise to a financial and reputation risk for your organization:
“It is also vital that CFOs understand that risk, regardless of whether it is operational or financial, is dynamic and can escalate rapidly.” – Shirine Khoury-Haq, CFO and CEO, Co-op Life Services in The CFO
Our experienced fractional CFOs are well-versed in all aspects of risk management and prepared to position your organization to respond to every type of risk. We do this by:
- Identifying and categorizing risks to understand the scope
- Evaluate the probability of each risk occurring and its impact
- Performing ongoing reporting on risk exposures
- Continually assessing the organization’s position
To respond to strategic, financial, and operational risks, you must view risk management as an ongoing high-priority activity. With the guidance of a fractional CFO, you can strengthen your strategic plan to incorporate risk mitigation and be better prepared to handle whatever situations arise for your business.
If you are worried that your organization is not well-positioned to respond to risk, reach out to speak to one of our experienced CFOs. We can listen to your concerns and share some guidance, as well as help you understand how the services of a part-time CFO can help your business find long-term success.