FUNDAMENTAL OF RISK MANAGEMENT Dr Josephine Adekola Josephine

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FUNDAMENTAL OF RISK MANAGEMENT Dr. Josephine Adekola Josephine. Adekola@gcu. ac. uk

FUNDAMENTAL OF RISK MANAGEMENT Dr. Josephine Adekola Josephine. Adekola@gcu. ac. uk

Module Delivery Plan Wee Pre-recorded lectures k Topic No. 1 Introduction to Corporate Risk

Module Delivery Plan Wee Pre-recorded lectures k Topic No. 1 Introduction to Corporate Risk Management 2 Risk Management Framework Online activities Lecturer No seminar Josephine Online live Josephine 3 Risk Management in Practice – Guest lecture pre-recorded. Online live Josephine 4 Business Continuity Planning Online live Josephine 5 6 Risk Identification Risk Analysis and Control Techniques Monitoring and Reviewing When Risk Management Fails Online live Taylor Online live Sarah 11 Global Risk Issues Strategic Risk Management and ERM Risk Culture and Leadership Online live Sarah 12 Course Work Two Review No seminar Sarah 7 8 9 10 page 2 Online live Taylor No seminar Coursework Taylor one Test/Exam

Module Assessment 1. Course Work 01 30. 00 35. 00 Online Text/Exam 2. Course

Module Assessment 1. Course Work 01 30. 00 35. 00 Online Text/Exam 2. Course Work 02 70. 00 35. 00 Case Study Report • Pass Mark 40% UG Core text: Paul Hopkin, (2018). Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management Available online through GCU library page 3

Assessment 1: Weighting 30% Online exam – 24 hours Assessment 2: Weighting 70% Individual

Assessment 1: Weighting 30% Online exam – 24 hours Assessment 2: Weighting 70% Individual Task – Critically discuss the following statement: “Adherence to a risk management framework is an essential requirement for modern organisations. ” page 4

Indicative Reading Paul Hopkins (2018). Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective

Indicative Reading Paul Hopkins (2018). Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management Online sources: • Chartered Insurance Institute: http: //www. cii. co. uk • Institute of Risk Management: http: //irmqt. co. uk • Association of Insurance & Risk Managers: http: //www. airmic. com • Health & Safety Executive: http: //www. hse. gov. uk • Financial Conduct Authority: http: // www. fca. gov. uk • BBC: <http: //www. bbc. co. uk> page 5

Why talk about risk? • Risk is something that we all face every day.

Why talk about risk? • Risk is something that we all face every day. • Organizations take risks in pursuit of meeting set objectives. • To raise awareness that we all have to manage risk as part of our daily working lives as well as personal. page 6

What is a Risk? • Risk is present in everything we do OR not

What is a Risk? • Risk is present in everything we do OR not do • Anything that could harm, prevent, delay or enhance your ability to achieve your objectives • It is the UNCERTAINTY that surrounds future events and outcomes. • ISO 31000, the international standard on risk management, defines it this way: Risk = the affect of uncertainty on your objectives. • Risk can be a threat or an opportunity https: //www. youtube. com/watch? v=EREt_ZWSJg. Q page 7

Other Pressures • Greater transparency • Better governance • Better ethical standards • Need

Other Pressures • Greater transparency • Better governance • Better ethical standards • Need for early warning systems • Demands for higher quality services • New legislation • Systems reform/project management

Wrong assumptions about risk • Risk is just something for finance and insurance to

Wrong assumptions about risk • Risk is just something for finance and insurance to worry about. • Risk comes up on the agenda once a year. • Risk management is just another layer of unnecessary bureaucracy. • Risk management is about downside not creation of value. • Risk is a compliance issue.

What do we know about Risk Management? q RM is part of our every

What do we know about Risk Management? q RM is part of our every day lives: – Crossing the road - Risk of getting run-over – Managing our finances – Risk of going broke – Purchase of insurance – Risk of fire, theft, storm – Choosing to smoke – Risk of cancer – Going for a swim – Risk of drowning q The choices we make in choosing to accept these risks is part of who we are page 10

Definition of Risk Management ISO / IRM: Coordinated activities to direct and control an

Definition of Risk Management ISO / IRM: Coordinated activities to direct and control an organization with regards to risk. It generally includes risk: – assessment, – treatment, – acceptance and – Communication. Contained in ISO 31, 000 page 11

RM definition contd… A process whereby organizations methodologically address the risks associated with their

RM definition contd… A process whereby organizations methodologically address the risks associated with their activities with the goal of achieving sustained benefit within each activity and across the portfolio of all activities. page 12

Risk Management International expectations are now that all organisations should: • Identify, evaluate and

Risk Management International expectations are now that all organisations should: • Identify, evaluate and manage their key risks and assess how they are controlled • Ensure these are regularly reviewed on an appropriate cyclical basis • Have regular board level reviews of reports on risk management and internal control

Risk Management And that: Risk management and internal control should be: • Embedded in

Risk Management And that: Risk management and internal control should be: • Embedded in the operations of an organisation • Capable of responding to the changing risks it faces • Include procedures for reporting major weaknesses immediately to appropriate levels of management

Risk Management In the UK all public bodies have been told: • “…it is

Risk Management In the UK all public bodies have been told: • “…it is important that authorities have arrangements in place for reviewing both the nature and severity of risks…such a review should not just be to “obvious tangible” risks such as arson, vandalism and other damage to property… risk management should be an integral part of an authority’s overall management arrangements. ”

Risk Management It went on to add: “In order to be successful it is

Risk Management It went on to add: “In order to be successful it is likely that the approach will be cross-departmental and inter-disciplinary and that senior management will demonstrate commitment. ”

How does Risk Management help? • Increase risk awareness & understanding • Allows intelligent

How does Risk Management help? • Increase risk awareness & understanding • Allows intelligent “informed” risk-taking. • Focuses efforts –helps prioritize. • Is proactive…. not reactive – Prepare for risks before they happen. • Improve outcomes – achievement of objectives • Enables accountability, transparency and responsibility • And maybe even mean survival page 17

Key Terms • Risk – Exposure to chance of hazard • Risk Level –

Key Terms • Risk – Exposure to chance of hazard • Risk Level – A measure to represent the significance of the risk • Controls – Action(s) that could eliminate or reduce the risk level • Residual Risk – Risk level after implementing controls • Risk Response – An action on the risk, whether to accept, or not to accept page 18

Exercise - 1 • Think of a risk in your daily life • Determine

Exercise - 1 • Think of a risk in your daily life • Determine the probability of occurrence • Make an assessment of an impact, if it occurs. page 19

Who is involved? �Customer �End user �Project Team �Senior Management �Related Project teams �Vendors

Who is involved? �Customer �End user �Project Team �Senior Management �Related Project teams �Vendors and suppliers page 20

When? A continuous process • �Starts from proposal stage • �Ends on project completion

When? A continuous process • �Starts from proposal stage • �Ends on project completion Review stages • �Business case analysis • �Project approval • �Project planning • �Technology, Tools & Vendor selection • �Project status reviews • �Deployment and Maintenance page 21

A Simple Framework page 22

A Simple Framework page 22

End page 23

End page 23

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Risk Management RISK MANAGEMENT Risk Management RM ApplicationRisk Management RISK MANAGEMENT Risk Management RM Application
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