Communicating Risk to the Board 📊

3 million is different.

Not because the number is more true, but because it can be compared to something.

It can be compared to an investment, an insurance or a budget.

So that's the language that the board is speaking So you can put money on two things.

You can put money on your exposure and you can put money on your mitigation plans.

And then that's in that way you can make the budget for the board and you can do so in the dotlegal platform.

Within the platform you will have your risk overview and you could have the same overview in terms of different areas where you can have risk exposure and you can have an economic.

On, each risk it will look like this.

So I will just create a risk assessment.

Let's say on this legal entity I have identified a new risk scenario.

I will add the risk scenario and then I will assess the risk scenario.

I will identify a high risk in this example and I will say the consequences are these and make a justification for my choices.

And I will do the same on the probability.

And then the interesting part here, I can specify the financial exposure, which means if this risk would apply, what would our financial exposure then be?

So I can set an amount, you can select different currencies and so on.

But in this example it would be €250,000.

And then I can save it.

Now I have a high risk and I have an exposure of €250,000.

And in my overview I will see that my total risk exposure within this area looks like this.

Then I can make a plan.

So if I go back I find the risk and I will make a mitigation plane here I can make a plan, explain it, set some security measures, and then I can set a risk afterwards, and an estimated cost to implement this plan.

Let's say it will cost us 25,000 but, afterwards the financial exposure will be down, to 50,000.

So I'll save this and I will now have a mitigation plan with an budget, as well.

Then I can look at my risk exposure.

But after, mitigation my risk exposure will be lower because we will implement mitigations.

So in this way I can work with the economic in three different ways.

I can look on a, current exposure in terms of the risk we have identified.

I can look at an exposure after mitigation plans have been implemented, and I can look at a cost for each of my mitigation plans.

And this is the language that most boards will be able to understand.