Institutional Risk Management Improvement Process
Risk management improvement begins with the Board of Directors. The graduation approach employed within the Risk Management Graduation Model (RMGM) framework provides senior management and the Board of Directors a forward-looking view of the recommended risk management structures which should be in place to align risk management best practice with the strategies laid out its multi-year business plan. Through assessing its adherence to best practice risk management standards, MFIs are then able to determine their Institutional Graduation Path – a work plan developed by senior management and the board which describes how the institution will develop its formal risk management function into adherence with the RMGM framework over time. With a forward-looking view of the improvements needed to adhere to best practice risk management, senior management and Board of Directors are in a position to strategically plan and best allocate personnel and financial resources towards risk management improvement. With a suitable plan in place, an MFI can then execute the plan and evaluate the use of resources. This institutional risk management improvement process is a continuous and dynamic process.
Identify institutional tier level within the Risk Management Graduation Model
Assess adherence to Risk Management Graduation Model guidelines
Determine institutional Risk Management Graduation Path
Determine tactical workplan for risk management improvement strategy
Implement risk management improvement strategy
Evaluate risk management improvement strategy