Risks Management

CATEGORIES OF RISKS
Financial
 Reduction in funding
 Failure to safeguard assets
 Poor cash flow management
 Lack of value for money
 Fraud/theft
 Poor budgeting
Strategic
 Engages in activity at variance with its stated objectives

 Fails to engage in an activity that would support its stated objectives
Operational
These risks result from failed or inappropriate policies, procedures, systems or activities such as:
 Failure of an IT system
 Poor quality of services delivered
 Lack of succession planning
 Health & Safety risks
 Staff skill levels
 No process to track contractual commitments
Reputational
 Organization engages in activities that could threaten its good name

•Through association with other bodies
•Staff/members acting in a criminal or unethical way
 Poor stakeholder relation
Governance and Compliance
 Lack of oversight by Board

 Segregation of duties not defined formally
 Ensuring compliance with funders' terms and conditions
 Compliance with applicable legislation
•Safeguarding of vulnerable individuals

•Taxation Law
•Data Protection
•Health & Safety Law
The Risk Management Process
A significant part in the risk management standard that requires the organizational team to recognize
what its aims and goals are.
 What are your intents and objectives?

 What does your business exist for?
 What are your services or deliverables?
 Who are your affiliates, patrons and clienteles?
This collective perception is essential for the reason that it presents the restrictions or framework for
risk assessments. Thus, the process includes the following:
 Establish the Context

 Identify Risks Analyze and Evaluate Risks
 Develop Risk Treatment Strategies
 Monitor & Review
RISK CONTROL
A control measure is something that is already existing. Example of which may include, but nit limited to
the following:
4. A prevailing management policy
5. Work procedure and practices
6. Technical system
7. Training program
8. Contract management planning guidelines
Control Values
Code Description
HE The control happens to be highly effective as
Highly Effective it lowers the chances of the risk-taking place
and/or it lessens the consequences if the risk
does strike.
ME The control happens to be moderately
Moderately effective as it only partly decreases the odds
Effective of the risk transpiring and/or somewhat
eases the magnitudes if the risk does occur.
E The control happens to be ineffective as it
Ineffective does not lower the possibility of the risk
occurring and/or it does not diminish the
consequences if the risk does take place.
DEFINING LIKELIHOOD AND CONSEQUENCE
A challenging, but significant chore when forming the consequence and likelihood matrix is to ascertain
what represents an "Almost Certain" and what establishes a "Rare"; when is a magnitude rated
"Significant" and which ones are considered a "Catastrophic".
With mounting outlays and shrinking finances, it is not constantly contained by a corporation's
proficiency to perform and complete systematic and specialized measurements and findings. It is always
best to be working with people who have proper skills and trainings to back up their work and deliver a
credible analysis.
ANALYZING LIKELIHOOD/CONSEQUENCE FOR RISK RATING
Risk analysis is about:
a. Determining the likelihood of events
b. The magnitude of their consequences and
c. The mitigating factors that would:
•Reduce the nature.
•Frequency or
•Damaging effects of the consequences.
When evaluating likelihood and consequences, you may consider asking the
following usual questions:
 How prone is this risk to occur?

 What will be the consequences in case it does happen? By and large, what will be the overall risk
level?
 Is the risk Acceptable or Unacceptable?
The formula for the risk matrix is simple enough for everyone to comprehend
Likelihood+ Consequence-Controls in Place= VULNERABILITY
Likelihood and Consequence Matrix
Unacceptable Risks
H- a High Risk Attention, Time and Resources required
S-a Significant Risk, Attention required
Acceptable Risks
M-a Moderate Risk, Monitor
L-a Low Risk, Standard Operating Procedures to handle

Likelihood, Priority Criteria and Consequences
LIKELIHOOD
Rank Category Description
A Almost Certain The event is expected to occur
in most circumstances
B Likely The event will probably occur in
most circumstances.
C Possible The event should occur at some
time.
D Unlikely The event could occur at some
time.
E Rare The event may occur only in
exceptional circumstances
PRIORITY CRITERIA
 Grievance to injury and casualty aftermaths

 Damage to persona, reputation, and integrity Damage to private property
 Damage to structural resources Environmental damage

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CATEGORIES OF RISKS

 Engages in activity at variance with its stated objectives

 Organization engages in activities that could threaten its good name

•Staff/members acting in a criminal or unethical way

 Poor stakeholder relation

Governance and Compliance

 Lack of oversight by Board

•Safeguarding of vulnerable individuals

•Health & Safety Law

The Risk Management Process

 What are your intents and objectives?

 Establish the Context

4. A prevailing management policy

5. Work procedure and practices

8. Contract management planning guidelines

DEFINING LIKELIHOOD AND CONSEQUENCE

Risk analysis is about:

a. Determining the likelihood of events

b. The magnitude of their consequences and

c. The mitigating factors that would:

•Reduce the nature.

•Damaging effects of the consequences.

following usual questions:

 How prone is this risk to occur?

Likelihood+ Consequence-Controls in Place= VULNERABILITY

Likelihood and Consequence Matrix

H- a High Risk Attention, Time and Resources required

S-a Significant Risk, Attention required

M-a Moderate Risk, Monitor

L-a Low Risk, Standard Operating Procedures to handle

 Grievance to injury and casualty aftermaths

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