Implementing an effective risk management strategy based upon
Implementing an effective risk management strategy based upon knowledge Peter Scott
What is Risk? “Chance of bad consequences” The concise Oxford Dictionary PETER SCOTT CONSULTING
What is Knowledge? “The sum of what is known” The concise Oxford Dictionary PETER SCOTT CONSULTING
An integrated strategy Risk Knowledge Management PETER SCOTT CONSULTING
Law Firm Risks op l Pe al n io at t pu e Operational Re Asset Management l Eco no poli mic, tic fisc al, al a Fin IT ion t i t pe ss m o C usine /b ia nc tory a l u g e R PETER SCOTT CONSULTING
Risk/KM Risks are inter-related Failure to manage knowledge involves widespread risk KM is an essential part of an integrated risk management strategy PETER SCOTT CONSULTING
Example: Reputational Risk Operational People Regulatory IT Competition & Business Markets Economic, Political & Fiscal Financial Assets PETER SCOTT CONSULTING
Law Firm Risks op l Pe al n io at t pu e Operational Re Asset Management l Eco no poli mic, tic fisc al, al a Fin IT ion t i t pe ss m o C usine /b ia nc tory a l u g e R PETER SCOTT CONSULTING
Management Risks Is your management in control of its knowledge and managing your risk? PETER SCOTT CONSULTING
Your Risks? Where does the knowledge relating to your risks reside? Can you access it? Can you capture it? Can you maintain and upgrade it? PETER SCOTT CONSULTING
Implementing a Risk Strategy DIAGNOSIS Identification and assessment MITIGATION Control, transfer and avoidance MONITORING Tracking and reporting When a risk crystallises LIMITATION Minimising the effect of crystallised risks PETER SCOTT CONSULTING
Risk Identification Involves: Being management driven Brainstorming Facilitated discussions Questionnaires Top down/bottom up PETER SCOTT CONSULTING
Risk Diagnosis Set criteria for assessing risks Identify detailed risks Identify high level risks Assess severity of detailed risks Assess severity of high-level risks Risk map Risk summary PETER SCOTT CONSULTING
Risk Assessment Incidence - probability Impact - severity PETER SCOTT CONSULTING
Risk Mapping PETER SCOTT CONSULTING
Risk Mitigation Designed to: Reduce Avoid Accept Transfer PETER SCOTT CONSULTING
Risk mitigation Risk map Risk summary Consider impact/probability correlation Consider available mitigation techniques Residual risk summary Contingency plan requirements Insurance requirements summary Required controls PETER SCOTT CONSULTING summary
Monitoring involves Tracking and reporting Comparing actual outturns to preset indicators Confirming effectiveness of risk responses Reporting compliance and exceptions PETER SCOTT CONSULTING
Risk monitoring Required controls summary. Contingency plan requirements Insurance requirements summary Set risk indicators and methods to monitor them PETER SCOTT CONSULTING Annual Risk Management Report
Limitation involves Risk crystalisation scenarios Contingency plans Limitation procedures Post event assessment PETER SCOTT CONSULTING
Use of IT Use an integrated risk management system to quantify, assess and control risk by : streamlining diagnosis, mitigation and monitoring n embedding common risk management procedures n providing information access to all who need it n creating and maintaining one central, up to date risk PETER database SCOTT CONSULTING n
Example – Risk Summary – an overview of risks PETER SCOTT CONSULTING
Example – Detailed Risks PETER SCOTT CONSULTING
Example - Controls PETER SCOTT CONSULTING
Example - Questionnaires PETER SCOTT CONSULTING
Example – Final Evaluation PETER SCOTT CONSULTING
Advantages of a formal risk management process? Structured approach focuses on key risks Elimination of redundant procedures Comfort / assurance to PI insurers Universal application to all risk areas Continuous monitoring ensures management of risk is “lived” day to day PETER SCOTT CONSULTING
Risk/KM Risk Knowledge Management PETER SCOTT CONSULTING
Implementing a Risk Strategy DIAGNOSIS Identification and assessment MITIGATION Control, transfer and avoidance MONITORING Tracking and reporting When a risk crystallises LIMITATION Minimising the effect of crystallised risks PETER SCOTT CONSULTING
Any questions? PETER SCOTT CONSULTING
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