8/22/2019 32- Risk Management in Organizations

1/19

UNCTAD 2000 1

End

Mouse Click to move on to the next slide

Risk management

Who uses Risk Management?

How is Risk Management used?

What is Risk Management?

8/22/2019 32- Risk Management in Organizations

2/19

UNCTAD 2000 2

End

Mouse Click to move on to the next slide

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?

8/22/2019 32- Risk Management in Organizations

3/19

UNCTAD 2000 3

End

Mouse Click to move on to the next slide

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?

8/22/2019 32- Risk Management in Organizations

4/19

UNCTAD 2000 4

End

Mouse Click to move on to the next slide

Risk Management is amethodology that helps managersmake best use of their available

resources

What is Risk Management?

8/22/2019 32- Risk Management in Organizations

5/19

UNCTAD 2000 5

End

Risk Managementpractices are widely used

in public and the privatesectors, covering a widerange of activities oroperations.

These include:

Who uses Risk Management?

Finance andInvestment

Insurance

Health Care

Public

Institutions

Governments

8/22/2019 32- Risk Management in Organizations

6/19

UNCTAD 2000 6

End

Effective Risk Managementis a recognised and valued skill.

Educational institutions have formalstudy courses and award degrees in RiskManagement.

The Risk Management process is wellestablished. (International RM processstandards.)

Who uses Risk Management?

8/22/2019 32- Risk Management in Organizations

7/19UNCTAD 20007

End

Risk Management isnow an integral part of business

planning.

Who uses Risk Management?

8/22/2019 32- Risk Management in Organizations

8/19UNCTAD 2000 8

End

The Risk Management

process steps are ageneric guide forany organisation,regardless of the

type of business,activity or function.

How is Risk Management used?

There are7steps

in the RMprocess

8/22/2019 32- Risk Management in Organizations

9/19UNCTAD 2000 9

End

The basic process steps are:

Establish the context

Identify the risks

Analyse the risks

Evaluate the risks

Treat the risks

8/22/2019 32- Risk Management in Organizations

10/19UNCTAD 2000 10

End

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

Communication & consultation

Monitoring and review

and

8/22/2019 32- Risk Management in Organizations

11/19UNCTAD 2000 11

End

The Risk Management process:

The strategic and organisational contextin which risk management will take place.

For example, the nature of yourbusiness, the risks inherent in yourbusiness and your priorities.

Communicate & consult

Establish the context

8/22/2019 32- Risk Management in Organizations

12/19UNCTAD 2000 12

End

The Risk Management process:

Communicate & consult

Monitor and review

Defining types of risk, for instance,Strategic risks to the goals and

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

Past events, future developments.

Identify the risks

8/22/2019 32- Risk Management in Organizations

13/19

UNCTAD 2000 13

End

The Risk Management process:

Communicate & consult

Monitor 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?)

8/22/2019 32- Risk Management in Organizations

14/19

UNCTAD 2000 14

End

The Risk Management process:

Communicate & consult

Monitor and review

Evaluate the risks

Rank the risks according to

management priorities, by risk categoryand rated by likelihood and possiblecost or consequence.

Determine inherent levels of risk.

8/22/2019 32- Risk Management in Organizations

15/19

UNCTAD 2000 15

End

The Risk Management process:

Treat the risks

Develop and implement a plan with specificcounter-measures to address theidentified risks.

Consider:

Priorities (Strategic and operational)

Resources (human, financial and technical)

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

8/22/2019 32- Risk Management in Organizations

16/19

UNCTAD 2000 16

End

The Risk Management process:

Document your risk management plan anddescribe the reasons behind selecting the

risk and for the treatment chosen.

Record allocated responsibilities, monitoringor evaluation processes, and assumptions on

residual risk.

Communicate & consult

Monitor and review

Treat the risks

8/22/2019 32- Risk Management in Organizations

17/19

UNCTAD 2000 17

End

The Risk Management process:

Communicate & consult

Risk Management policies and decisionsmust be regularly reviewed.

Monitor and review

In identifying, prioritising and treating risks,organisations make assumptions and decisions

based on situations that are subject tochange, (e.g., the business environment,trading patterns, or government policies).

8/22/2019 32- Risk Management in Organizations

18/19

UNCTAD 2000 18

End

TheRisk Management process:

Risk Managers must monitor activities andprocesses to determine the accuracy of

planning assumptions and the effectivenessof the measures taken to treat the risk.

Methods can include data evaluation,

audit, compliance measurement.

Communicate & consult

Monitor and review

8/22/2019 32- Risk Management in Organizations

19/19

UNCTAD 2000 19

End

The Risk Management process:

Establish the context

Identify the risks

Analyse the risks

Evaluate the risks

Treat the risksMonitoringand

review

Comm

unication

&

consult

ation