1. Understanding Risk
Greg Hungerford

2. What is Risk?
“An adverse event resulting from business operations or its operating environment that could jeopardise the businesses ability to achieve its objectives”
or favourable
or advantage

3. Traditional – pure risks Modern - opportunities
Three Approaches to Risk
Traditional – pure risks
Modern - opportunities
Emerging – different affects on stakeholders

4. Operational and Environmental Risks Legal Risks Strategic Risks
Types of Risk
Financial Risks
Operational and Environmental Risks
Legal Risks
Strategic Risks
Privacy and Information Risks

5. Sources of Risk
Intrinsic Risks
Extrinsic Risks

6. Intrinsic Risks Extrinsic Risks Reputation Human Capital Operational
Technological
Financial
Strategic
Extrinsic Risks
Supply Lines
Competition
Man-made Disasters
Natural Disasters
Political and Legislative
Societal and Technical

7. What is Risk Management?
“The culture, process and structures that are directed towards the effective management of potential opportunities and adverse effects."

8. Hard v’s Soft Aspects Risk Management Culture (People) Structures
Processes

9. Embedded v’s Separate Activity
Culture
Embedded v’s Separate Activity
Everybody becomes involved
Philosophy
“Doing the Right Thing”

10. Mission, Vision, Values, Purpose Systems and Processes Structure
Cultural Drivers
Mission, Vision, Values, Purpose
Systems and Processes
Structure
Leadership
Job Design and Role Definition
Desired v’s Actual Behaviours

11. Risk Management Strategy Risk Management Policies
Structure
Risk Management Strategy
Risk Management Policies
Risk Management Procedures
Risk Register

12. Communicate and Consult
Processes – Managing Risk
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review

13. Analyse recipients of message Develop key messages and purpose
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Communicate and Consult
Establish objectives
Analyse recipients of message
Develop key messages and purpose
Identify communication owners and senders
Identify appropriate channels
Determine timing of communication
Deliver key messages

14. Intrinsic v’s Extrinsic Objectives Scope and Resources Record Keeping
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Establish Context
Intrinsic v’s Extrinsic
Objectives
Scope and Resources
Record Keeping
Risk Tolerance

15. …… something could happen
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Identify Risks
What
Where
When
Why
How
…… something could happen

16. Document risk identification process
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Identify Risks
What to consider
Risk Categories
Gather Information
Tools and Techniques
Brainstorming
Flow Charting etc
Document risks
Document risk identification process

17. Existing controls Risk likelihood Risk consequence Risk level
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Analyse Risks
Existing controls
Risk likelihood
Risk consequence
Risk level

18. Analyse Risks

19. Rank the risks Overall risk profile Prioritise risks Evaluate Risks
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Evaluate Risks
Rank the risks
Overall risk profile
Prioritise risks
Risk
Likelihood
Consequence
Overall Rating
Ranking A 2 4 6 B 3 12 C 8 D 1 7 E 9 F 5 G 15

20. Evaluate Risks

21. Identify risk treatment options Select risk treatment options
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Treat Risks
Identify risk treatment options
Select risk treatment options
Assign risk ownership
Prepare risk treatment plans

22. Change the Consequence Share/Transfer the Risk Retain the Risk
Treat Risks
Treatment Options
Avoid the Risk
Change the Likelihood
Change the Consequence
Share/Transfer the Risk
Retain the Risk

23. Understand the different types and levels of monitoring and review
Communicate and Consult
Establish
Context
Identify
Risks
Analyse
Evaluate
Treat
Monitor and Review
Monitoring and Review
Understand the different types and levels of monitoring and review
Establish your monitoring and review cycle
Measure risk management performance

24. THANK YOU

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