Page 23 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Risk management

What is risk management?

1.1 Definitions

 ‘the process of understanding and managing the risks that the
organisation is inevitably subject to in attempting to achieve its
corporate objectives’
(CIMA Official Terminology)

1.2 Reconciling conformance and performance

 Conformance Avoiding downside risk

 Performance Benefitting from upside risk

Conformance Performance

Controlling threats or Maximising return
hazards or opportunity
Risk
Management

‘bad things do ‘good things might

happen’ not happen’

13