treat

transfer
MODULE 5 DEVELOPMENT OF RM terminate
Resourcing controls to ensure that adequate arrangements are made to
 The origin of risk management  is traced back in the United States out of the introduce and sustain necessary control activities.
insurance management function.  The practice of risk management Reaction planning and/or event management.   For hazard risks, this will
became more widespread and better coordinated because the cost o f include disaster recovery  or business continuity planning.
insurance in the 1950s had become prohibitive and the extent of coverage Reporting and monitoring of risk performance, actions and events and
limited.  Then insurance buyers became more concerned with: communicating on risk issues, via the risk architectures of the
organization
1. quality of property protection Reviewing the risk management system, including internal audit
2. the standards of health and safety procedures and arrangements for the review and updating of the risk
architecture, strategy and protocols.
3. product liability issues
  DESCRIPTION
4. and other risk control concerns YEAR
     In Europe during the 1970s, the combined approach to
risk financing and risk control developed.  There was
realization that there should be total cost of risk involved in 1950 The corporate risk management in the US
the approach and it became obvious that there were many became an extension of insurance
risks facing organizations that were not insurable. purchasing decisions.

5.         Insurance is now seen as one of the risk control 1960 Contingency planning  became important
techniques applicable only to a portion of hazard risks.  and  there is emphasis beyond risk
Risks related to finance, commercial, marketplace and financing to loss prevention and safety
reputational issues are recognized as being hugely important. management
  DEFINITION OF RISK
ORGANIZATION MANAGEMENT 1970 Self-insurance, risk retention practices,
captive insurance and contingency plans
developed into business continuity planning
and disaster recovery plans.
ISO Guide 73 BS Coordinated activities to direct and
31100 control and organization with regard to 1980 Application of risk management techniques
risk to project management developed
substantially and financial institutions used
this techniques to market and credit risk . 

1990 The financial institutions further broadened

Process which ails to help organizations their risk management initiatives to include
Institute of Risk understand, evaluate and take action on structured consideration of the operational
Management all their risks with a view to increasing risks.
the probability of success and reducing
the likelihood of failure 2000 Financial services firms have been
encouraged to develop internal risk
management systems and capital models.

2002 Boards are now investing more time in

ERM due to the Sarbanes-Ocley Act of
All the processes involved in 2002 in the US.
HM Treasury indentifying, assessing and judging risks,
assigning ownership, taking actions to 2008 Questioned the contribution of risk
mitigate or anticipate them, and management can really make corporate
monitoring and reviewing progress success, especially in financial institutions.  
Global Financial Crisis happened and
obviously there was failure in  the
application of risk management process and
procedures.
London School of Selection of those risks a business should
  Description
Economics take and those which should be avoided
Specialist Area
or mitigated, followed by action to avoid
or  reduce risk.
Insurance Began in US to become an integral part of
Industry over-all management of industries.

Credit and Strong connections existed to facilitate

treasury functions compliance with risk management process.
Business Continuity Culture, processes and structures that are
Institute put in place to efectively manage potential
opportunities and adverse effects Project risk Emphasized on the management of
management uncertainty and control risks.

Clinical/Medical Primarily concerned with patient care,

risk management especially during surgical operations.

7 Rs Energy risk Mainly concerned with the future price of

Recognition or identification of risks and identification of the nature of management energy and with exploration risk.
the risk and the circumstances in which it could materialize.
Recognition or identification of risks and identification of the nature of
the risk and the circumstances in which it could materialize. Finance risk Focuses on operational risks, as well as
Ranking or evaluation of risks in terms of magnitude and likelihood to management market, credit and other types of financial
produce the ‘risk profile’ that is recorded in a risk register. risks.. It is in the finance sector that the title
Responding to significant risks, including decisions on the appropriate Chief Risk Officer (CRO) was first
action regarding the following options: developed
 tolerate
 A HEDGE is an investment position intended to offset potential losses or
gains that may be incurred by a companion investment (wikipedia).

In Risk Management, it is a strategy employed to offset losses in

investments by taking an opposite position in a related asset.
Risk maturity models can be used to measure the current level of risk
culture within the organization. The greater the level of risk maturity, the
more embedded risk management activities will become with in the
routine operations undertaken by the organization.
(3) LEVELS OF RISK MANAGEMENT SOPHISTICATION
 Awareness of non-compliance = Reform
 Actions to ensure compliance = Conform
 Achieve business opprotunities=Perform
 Inactivity caused by obsession =  Deform
MODULE 8
RISK MANAGEMENT ARCHITECHTURE
  DESCRIPTION
          It is the risk management structure of an organization.

II.  FUNCTION
          It sets out lines of communication for reporting on risk management issues and
events

III. IMPORTANCE
          It reinforces the fact that the responsibility for managing risks remains with the
owner of that risk.  It should be fully embedded into the process and
operations of an organization and there should be a clear statement of risk
management responsibilities required.

     Risk management responsibilities need to have an allocation with respect to the

following aspects of managing the risk:
 Development of risk strategy and standards
 Implementation of the agreed standards and procedures
 Auditing compliance with the agreed standards
RISK MANAGEMENT PROTOCOL
The risk management policy will set out responsibilities for risk as well
as the arrangements for implementing the policy.  Risk management
protocols will be set out in a series of risk guidelines. 
     Procedures and protocols for undertaking the assessment of risks to
strategy, projects and operations will need to established in writing.
Records Management is a key driver in increasing organizational efficiency and
offers significant business benefits. 
Importance of Records Management
1. Reduces the time spent by staff looking for information;
2. Facilitates the effective sharing of information;
3. Reduces the unnecessary duplication of information;
4. Identifies how long records need to be kept; 
5. Optimize the legal admissibility of records to defend
malicious litigation;
6. Supports risk management and business continuity planning.