Risk management generally consists of a fairly simple PROCESS made up of the following steps:
- Scoping your Risk Process
- Risk Identification
- Risk Quantification
- Risk Prioritisation
- Risk Analysis and Management Action Plan
- Action Tracking and Monitoring
Once one cycle of the process is completed it is important to decide when and how frequently it should be redone/updated !
On this site there is a separate tab for each of the RISK PROCESS steps steps which will provide more detail on what to do. An effective risk management process will need to include all the steps and should then keep the process alive going forward in time. Simply writing down a list of risks and an action plan and then putting these on file does not constitute an effective risk management process.
For a risk management process to be effective it needs ownership and commitment from senior leadership in the organisation. Risk management requires resources and must compete with other priorities in the organisation for these. There will be times when managers must decide between a normal business investment with an assured return and one that is needed to manage a risk which might not actually happen. Here judgement is required – where there is a serious potential risk to health, safety or the environment the management decision should be unambiguous – these risks must be effectively managed. Any ambiguity from leadership will confuse staff lower down the ladder and potentially lead to a disaster.
To take a closer look at the scope of a risk management process use the link here.
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