Page 80 - RISK Management IC86 Ebook

Risk Management

and ethical values are the key elements. This foundation and
culture set the course for how risk will be handled across the
enterprise; the independence and involvement of the board of
directors and the tone set by management have a critical
influence on the internal environment.

2. Objective setting
n A mission or vision is enacted through the objectives set by

the organization's management. Objectives are a focal point
of risk strategy.

3. Event identification
n Identifying potential events and distinguishing between those

representing loss, opportunity or a combination of both, allows
categorization of events into a common risk language, and
creates a basis from which a portfolio view of risk can be
formulated.

4. Risk assessment
n Identified risk events are analyzed in terms of the likelihood

and impact of the range of potential outcomes.

5. Risk response
n The categories of response available are:

l AVOIDANCE - Exit the activity, giving rise to risk

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