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Risk Management General Concept

The document outlines the concepts of risk and Enterprise Risk Management (ERM), emphasizing their importance in achieving business objectives and compliance with regulations. It details the components of COSO's ERM framework, which includes governance, strategy-setting, performance assessment, and communication. Additionally, it highlights the significance of managing risks to enhance stakeholder value and allocate resources effectively.

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16 views15 pages

Risk Management General Concept

The document outlines the concepts of risk and Enterprise Risk Management (ERM), emphasizing their importance in achieving business objectives and compliance with regulations. It details the components of COSO's ERM framework, which includes governance, strategy-setting, performance assessment, and communication. Additionally, it highlights the significance of managing risks to enhance stakeholder value and allocate resources effectively.

Uploaded by

kuiloveyu.gi.oh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Risk Management

Anuwat Sanguansappayakprn
11 February 2024
What is risk?

 The possibility that events will occur and


affect the achievement of strategy and
business objectives

 Source: COSO (2017). Enterprise Risk Management—Integrating with Strategy and


Performance.
 COSO = The Committee of Sponsoring Organizations of the Treadway Commission
What is Enterprise Risk Management?

 The culture, capabilities, and practices,


integrated with strategy-setting and its
performance, that organizations rely on to
manage risk in creating, preserving, and
realizing value.

 Source: COSO (2017). Enterprise Risk Management—Integrating with Strategy and


Performance.
 COSO = The Committee of Sponsoring Organizations of the Treadway Commission
Enhanced value Resources allocation
for stakeholders

Why managing risks?

Compliance with related


Risk appetite laws & regulations
Risk Management Frameworks

Source: Survey by RIMS 2017

29% 25%
COSO’s ERM
ISO 31000
20%
No frameworks

9%
Others
COSO’s ERM Framework Components
Governance and Culture

 Exercises Board Risk Oversight


 Establishes Operating structure
 Define Desired Culture
 Commit to Core Values
 Attracts, Develops
&Retain Capable Individuals
Strategy & Objective-Setting

 Analyzes Business Context


 Define Risk Appetite
 Evaluates Alternative Strategies
 Formulates Business Objectives
Performance

 Identifies Risk Likelihood

(5)
 Assesses Severity of Risk (1)
Rare
(2)
Unlikely
(3)
Possible
(4)
Likely
Almost
Certain

Prioritizes Risks

Consequence / Impact
 (5)
Catastrophic
H H H E E

(4) Major M M H H E

(3) Moderate M M H H H

(2) Minor L L M M H

(1) Insignificant L L L M M
Performance

 Implements Risk Responses


 Develop Portfolio View
Review and Revision

 Assesses Substantial Change


 Review Risk and Performance
 Pursues Improvement
in Enterprise Risk Management
Information, Communication, and
Reporting
 Leverages Information and Technology
 Communicates Risk Information
 Reports on Risk Culture and Performance
COSO’s ERM Framework Components
Are you ready?

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