ERM Week5
ITS 835
Unit 5
Dr. Waters
Introduction
Context of Risk Management
Initial steps
Evolution of Risk Management
Bringing everything together
Initial Steps
Strategic objectives
Establish a governance system
Multiple committees, each with specific responsibilities
Governance Framework
Evolution of Risk Management
Lack of strategic risk management led to many problems
Communication
Missed/lost opportunities
Lack of commitment to objectives
Declining quality
Identified gaps in risk management
Engaged in aggressive internal training
Soft skills
Team building
Management planning
Using Context for Risk Criteria
Bringing Everything Together
Risk Map
Risk Atitude
Strategic Risk Management
Strategic Risk Management Framework
Enables organization to discover risks
Across organizational boundaries
Continuous cycle
Considers interactions of multiple risks
Combines risk appetite and risk tolerance
Defines exploitable risks
Sample Case Study
Three basic risks
Earthquake exposure to buildings
Workers’ compensation insurance
General liability insurance
References
J. Hash, Risk Management Guidance For Information Technology Systems, ITL Bulletin, (2002).
Hillson D. A. & Murray-Webster R. (2005) Understanding and managing risk attitude. Aldershot, UK: Gower
Kahneman D. & Tversky A. (1979) Prospect theory: An analysis of decision under risk. Econometrica, 47 (2), 263-297
Raz T. & Hillson D. A. (2005) A comparative review of risk management standards. Risk Management: An International Journal, 7 (4), 53-66
Yates J. F. (ed) (1992) Risk-taking behaviour. Chichester, UK: J Wiley