Abstract: A risk is defined as an uncertain event or condition that, if it occurs, will have an impact on the business objectives. This impact is normally negative. The Management of Risk entails having the right information to make the right decision at the right time. Thus, knowledge of the company's biggest risks and the optimum mitigation actions is critical for Risk Management. Risk is everybody's business, as risks are evident throughout the company. ISO 31000, Risk Management, describes a generic process for managing risk. At corporate level, there are four basic risk categories: Strategic, Financial/Reporting, Operational, and Compliance. The Company's risk appetite differentiates between acceptable and unacceptable risk and is defined by the Company Board of Directors. A “statement of risk” is required in the company top governance framework document. The four Strategies of Risk Control (4 Ts) are tolerate, treat, transfer, or terminate. Three lines of defense (line management, corporate risk team, and audit) are advocated for full control of corporate risk. Assurance Services are defined as “an objective examination of evidence for the purpose of providing an independent assessment on governance, risk management and control processes for the organisation.” Assurance Services include Audits, Asset Integrity Reviews, Quantitative Risk Assessment (QRA), HSE Reviews, Measurement and Allocation Reviews, and Insurance Assessment. A Risk Management framework needs to be established in which the Risk Management System can operate. Risk Management Systems need to be assessed for maturity so as to initiate improvement of the System. Surveys, such as those undertaken annually by Aon, help companies with their strategic risk planning. Enterprise Risk Management has significant advantages for performance improvement of the business. These include bringing together all the top risks into a single risk register. The interaction for risk mitigation and control takes place at all levels in the business.
Publication Year: 2017
Publication Date: 2017-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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Cited By Count: 1
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