Risk management in British Airways Essay Example | Topics and Well Written Essays - 3000 words

Risk management in British Airways - Essay Example The overall process has been designed in a manner that it remains an iterative process wherein the changes and implementation of the existing and new risk management practices are scrutinized on continuous basis.( Goh, 2011). British Airways (BA) has a separate Corporate Risk Management Group in place which not only oversees the organization wide risk management practices of the firm but is also involved in managing internal control systems of the company. The Corporate Risk Group is overseen by a management board and senior key executives to ensure that the involvement of the key senior managers remains so that required improvements could be achieved and the process is managed strategically. The existing risk management practices of BA involve not only the identification of the key risks and their drivers but also their mitigation and management. The overall process is monitored at the Board Audit Committee level and involves senior management to provide an independent review and in sight into the risk management practices of the firm. Current Risk Management Process The current risk management process and its infrastructure within the organization are based on a combination of independence and authority. BA has put in place a separate risk management group which has the overall responsibility of managing the corporate risk affairs of the firm. The group is headed by the Head of Corporate Risk and Internal Controls and oversees different aspects of the risk management process. Further, there is a supervisory management board which comprises of the key senior managers of the firm to provide strategic insight and ownership to the strategic management process within the organization. (Rothwell, 2011). Company maintains a corporate risk register which is actually used for the purpose of identifying the risks and recording them for the purpose of review and assessment. The overall assessment process is based on quarterly reviews wherein the management board as well as the senior managers along with the Corporate Risk Managers evaluate the existing and new risks and determine the future course of action. It is also important to note that this is the highest level within the organization which actually assess and outlines the risk management processes within the organization. The work is further distributed to the individual departments and risk leaders within each department responsible for the management of risk at the departmental and individual level. It is also important to note that the risk at the individual level is measured through an internally developed matrix called Heat Map. Heat Map takes into account each individual risk based on its likely impact and the overall likely scale.1 This therefore allows BA to map its overall risk identification process according to the overall importance and impact of the risk on the organization. Once the different critical risks are identified, mitigating factors for managing the risk are identified and are each risk is individually managed. A report is finally produced which attempt to address different risk issues and responsibilities and accountabilities are than fixed at the individual level to ensure that the overall process is delegated to the lowest level of the organization. It is also critical to understand that this report usually do not contain the mapped results and critical actions required to be undertaken. This is purposefully done by BA in order to