Why does your Organisation size affect risk management?

Mar 8, 2020

We are all familiar with Organisation size and when it comes to risk management, Size Does Matter. 

But why?

Reference:

This content is extracted from my book "Risk Management Simplified: A Definitive Guide for Workplace and Process Risk Management". 

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What we know…

Typically, Organisation size relates to being Small, Medium or Large, especially in conversational terms.

Small and Medium-sized Enterprises (SMEs) are defined in the EU recommendation 2003/361 and this also includes an additional category known as “Micro”.

What’s the criteria?

The table below provides an overview (using Euro’s as the monetary value):

Key factors to take into consideration

The 2 key factors that define the size of an Organisation (or enterprise) are:

  1. Number of employees (or staff headcount); and
  2. Organisation’s finances (I.e., Turnover or Balance Sheet Total).

Using the above figures, the size of the Organisation can be defined. This is a useful baseline for comparative analysis with other similar Organisations

Why is it important?

Typically, the larger the Organisation, the larger the risk portfolio and the potential impact of risks.

If we know the size, we are in a better position for managing resources, training and awareness requirements (i.e., if you are a micro organisation, it is a good practice to focus valuable and limited resources on realistic risk management plans).

This doesn’t of course mean that large Organisations can flit away their resources. It just means they are more resilient and have greater resources at their disposal.

Understanding and knowing your Organisation Size will help towards developing meaningful Corporate Safety and Risk Strategies and Key Performance Indicators.

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