Business and Operational Risk
AS31000 “Risk Management – Principles and Guidelines” defines risk as “the effect of uncertainty on objectives”.
In the conduct of an organisation’s business, it will encounter many sources of risk that can have significant effects on the overall business objectives. Unplanned events can cause major business losses. To manage these exposures, many organisations conduct extensive analysis of business and operational risk. Too often these activities are conducted without maximising the benefits that can be achieved. A key aspect that is commonly missing is the incorporation of the outputs of the risk management program into the decision-making processes at all levels of the organisation.
Managing risk is not “rocket science”. It does not need to be a totally exhaustive or complicated process. However, it is critical that all major business risks are identified and assessed and that these risks are being suitably managed.
A key aspect of R4Risk’s approach to risk management is to ensure that the risk implications of the various issues are well-understood. Armed with this vital knowledge, the management of an organisation can then make sound business decisions, appreciating the positive and negative risk implications of each decision.
The basis of R4Risk’s approach to operational risk management is as follows:
- Thorough identification of risk issues
- Thorough understanding of the level of risk that each risk issue (or group of issues) presents – identification and ranking of the major risk issues
- Clear identification of the applicable control measures for each risk issue
- Identification of the means by which the performance of the control measures will be maintained
- Ongoing review
R4Risk’s Principal Engineers have worked with major clients in the mining, petroleum and manufacturing sectors to assist those clients with identifying their major risk exposures and setting up systems for ongoing risk management. This professional knowledge and experience is drawn on to ensure that the risk management processes developed are specifically tailored to each individual client’s needs.
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