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Good management practice

Process steps that enable improvementin decision making

A logical and systematic approach

Identifying opportunities Avoiding or minimising losses

What is Risk Management?What is Risk Management?

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Risk Management is the name givento a logical and systematic methodof identifying, analysing, treatingand monitoring the risks involved in

any activity or process.

What is Risk Management?What is Risk Management?

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The Risk Management

process steps are ageneric guide forany organisation,regardless of the

type of business,activity or function.

How is Risk Management used?How is Risk Management used?

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There are

77 stepsin the RMprocess

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The basic process steps are:

Establish the context

Identify the risks

Analyse the risks

Evaluate the risks

Treat the risks

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Risk is dynamic and subject to constantchange, so the process includescontinuing:

Communication & consultation

Monitoring and review

and

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The Risk Management process:

The strategic and organisational context

in which risk management will takeplace.

For example, the nature of yourbusiness, the risks inherent in your

business and your priorities.

Communicate & consult

Establish the context

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The Risk Management process:

Communicate & consultMonitor and review

Defining types of risk, for instance,S

trategic risks to the goals andobjectives of the organisation.

Identifying the stakeholders, (i.e.,whois involved or affected).

Past events, future developments.

Identify the risks

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The Risk Management process:

Communicate & consultMonitor and review

Analyse the risks

How likely is the risk event to happen?

(Probability and frequency?)

What would be the impact, cost orconsequences of that event occurring?(Economic, political, social?)

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The Risk Management process:

Communicate & consultMonitor and review

Evaluate the risks

Rank the risks according to

management priorities, by riskcategory and rated by likelihood andpossible cost or consequence.

Determine inherent levels of risk.

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The Risk Management process:

Treat the risks

Develop and implement a plan with specific

counter-measures to address theidentified risks.

Consider:

Priorities (Strategic and operational)

Resources (human, financial and technical)

Risk acceptance, (i.e., low risks)

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The Risk Management process:

Document your risk management plan anddescribe the reasons behind selecting therisk and for the treatment chosen.

Record allocated responsibilities, monitoringor evaluation processes, and assumptions on

residual risk.

Communicate & consultMonitor and review

Treat the risks

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The Risk Management process:

Risk Managers must monitor activities andprocesses to determine the accuracy ofplanning assumptions and the effectivenessof the measures taken to treat the risk.

Methods can include data evaluation,

audit, compliance measurement.

Communicate & consult

Monitor and review

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The Risk Management process:

Establish the context

Identify the risks

Analyse the risks

Evaluate the risks

Treat the risks