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Risk Management
Performance & Audit Panel24 January 2006George Hook, Interim Risk Coordination Manager
What do we mean by ‘risk’?
‘Risk arises as much from failing to capture business opportunities when pursuing strategic and operational objectives as it does from a threat that something bad will happen’
• Traditional view of risk was negative
• Risk = Uncertainty
What is Risk Management?
• We all manage risk intuitively keeping uncertainty within acceptable levels
• Corporate need for that to be a visible, evidenced process
• Should be part of the ‘joined-up’ governance framework
Towards a balanced view of risk
Negative
Traditional view
All about threats
Risk averse
Positive
Developing view
About opportunities
Risk enabling
Why is risk management important to Ealing?
• Achievement of objectives – on time and budget
• Sound management practice• Identify opportunities• CPA
Risk Management ProcessRisk Identification
What could happen?How could it happen?
Risk Assessment
Likelihood? Impact?
Risk Mitigation & Management
Accept? Avoid?Reduce? Transfer?
Risk Profiling
Prioritisation
Risk Monitoring & Review
Ongoing process
Reporting
QuarterlyAnnually
Risk Registers
• Used to document the risk management process
• Strategic Risk register
• Operational Risk register
Risk Register layout
• Description of the risk• Category (strategic/operational)• Risk owner• Likelihood/Impact/overall gross risk score• Likelihood/Impact/overall residual risk score • Target risk score• Risk action plan – who will do what by when• Date – risk identified/reviewed/next review
Responsibilities for Risk Management
• Members• Corporate Board• Corporate Leadership Team• Risk Coordination Manager• Corporate Risk Management Forum• All of us
Benefits of Risk Management
• Increased understanding and ownership of risk
• Consistent, shared view• Fewer surprises – issues highlighted
quicker• Improved decision-making• Visibility and evidence
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