Chapter 3-4.pdf
- 2. Course Overview Define risk and risk management Establish a risk management context Describe the 7 R’s and 4 T’s that form the framework of risk management activities Design and complete a basic risk assessment Determine the appropriate response to risks and create a plan for those responses Describe the key components of reporting, monitoring, and evaluation of a risk management program
- 3. What is Risk? The effect of uncertainty on objectives. Typically related to one of four areas: 1. Strategy 2. Change management 3. Operations 4. Finance Risks can be positive, negative, or neutral. Understanding Risk
- 4. Some examples of risks: Business interruptions Changes in business relationships Changing labor market conditions System issues Access to information Security conditions Understanding Risk
- 5. Quantitative risks are those that can clearly be quantified. Qualitative risks are those that cannot easily be clearly quantified. You should always strive to make all qualitative risks quantitative, if possible, By collecting and analyzing data. Understanding Risk
- 6. What is Risk Management? Principles and processes that help minimize the negative impacts of risks and maximize the positive impacts. Process should be PACED: Proportionate Aligned Complete Embedded Dynamic Understanding Risk
- 7. Establishing Your Risk Management Context Regulatory or legal environment Communications methods Size of the organization Labor relations Structure of the organization Culture of the organization with respect to risk tolerance Understanding Risk
- 9. First step in risk management is to recognize and identify risks. Your risk assessment process should be proportionate to your organization You should have a template to track and record all information. How do you identify risks? Information gathering should always be a group activity. Gather hard data whenever possible. Assessing Risk
- 10. Assessing Risk
- 11. Risk Case Study
- 13. Strategies for Negative Risks or Threats ➢Avoid ➢Transfer ➢Mitigate ➢Acceptance Responding to Risks –(Negative)
- 14. Strategies for Positive Risks or Opportunities ➢Exploit ➢Share ➢Enhance ➢Accept Responding to Risks – (Positive)
- 15. Key Considerations Ensure normal business practices are not interrupted. Managing the media should be part of your plan. Direct communication with stakeholders is critical. If there is any chance that people may be injured or worse, you should Include medical support in your planning. You may be required by law to obtain insurance. Responding to Risks
- 16. Possible controls can include: Re-allocating existing people or equipment Additional people New equipment Skills and training New information Resourcing Controls
- 17. Your evaluation should look at: Does the control meet laws and regulations? How well does each control mitigate the risk? What is the cost of the control vs. the implementation benefit? What is the sustainability of the control? What changes might have to be made to this control? What other effects will this control have? Resourcing Controls
- 18. You should build a contingency plan for each major risk that has been identified. The plan should detail: When Who What Where Reaction Planning
- 19. When your organization establishes its risk management framework, a reporting hierarchy should also be established. Your reporting structure will differ depending on the complexity of your risk management program. Your organization will need to develop a checklist of items that will need to be reported on and monitored on a regular basis. Reporting and Monitoring
- 20. Items that will need to be reported on include: Changes to risks Near misses and incidents Changes that will affect the risk management program Reporting and Monitoring
- 21. Items that should be monitored include: Effectiveness of risk controls Cost of controls vs. benefit s achieved Laws and legislation Industry climate Alignment of risk management plan with corporate goals Reporting and Monitoring
- 22. ✓ Analysis of risk response measures, whether they achieved the desired result, and did so efficiently ✓ Review of reporting and monitoring procedures ✓ Knowledge gap analysis for risk assessments ✓ Compliance check with appropriate regulations and organizations ✓ Opinions of key external and internal stakeholders Reviewing and Evaluating the Framework
- 23. ✓Self-certification ✓Risk disclosure exercise, to identify future risks ✓Repeat of risk assessment ✓Lessons learned ✓Recommendations and implementation plan Reviewing and Evaluating the Framework