Risk Management
Risk Management is a systematic and continuous approach for dealing with uncertainty. Essentially risk can be described as the threats and opportunities to objectives and statutory obligations.
We must manage risk or it will manage us!
Risk can be categorised in a number of ways whether Strategic, Operational, Financial and Hazard. It must take account of external and internal influences. While it can be shaped, it cannot be totally eliminated - it is central to strategic management of our organisations.
Risk Management must be integrated into the organisation, its culture, plans, procedures and accountabilities. It must be led from the top - but it is everyone's business.
Good Risk Management Can Help You Take More Risks!!
Some words of caution:
- Risk management is much more than just Health & Safety
- Risk management is never addressed by List Management
- A judgement call is required based upon informed decision making
Useful Definitions
- Risk = the effect of uncertainty on objectives
- Likelihood = Extent to which an event is likely to happen
- Consequences = Impact on finance, strategy and operations
- Event = Occurrence of a particular set of circumstances
- Risk Appetite = the amount and type of risk that an organisations is prepared to pursue, retain or take
- Residual risk = riskremaining after risk treatment / controls
Useful Guidance:
A Structured Approach to Enterprise Risk Management (ERM) and the Requirements of ISO 31000.
http://www.theirm.org/ISO31000guide.htm
