Like the Clawfoot bathtub, risk management never goes out of style. In a blog for the Association for Project Management (APM), Catherine Bowles relays the contents of a presentation given by Lisa Shi at a November 2014 APMHK event in Hong Kong. The integration of both project and operational risks into an IT/business life-cycle approach is Li’s key contribution to the forum.
The ideal way to avoid hidden costs and accidents is to plan for their inevitable occurrence. Li recommends employing stakeholder management to align with stakeholder expectations and to manage risk. The systematic application of methods and practices for identifying and assessing risk is the means by which to achieve this goal.
In the instance of the financial industry, risk governance is a multi-faceted thing, covering the board (TB), risk management committee (RMC), asset and liability committee (ALC), and audit committee (AC). All are underpinned by business units (BU) and risk management units (RMU):
At the top, the board oversees the maintenance and development of a robust risk management framework with the risk management committee, which advises the board on internal control, risk-related matters. The audit committee reviews risk-related matters against processes and procedures. risk management units, in turn, report to the risk management committee and recommend on the ways and means to manage the risk identified, including top and emerging risks. They also develop and implement risk measurement methodologies. Finally, business units report to risk management units on risk assessment and respond to risks to the business process.
The Risk Management Process
Through risk governance, we can gain a categorical understanding of risk and its application as an organizational framework. But this does not give us a clear idea of the risk management process, which involves identification of risk (and associated opportunities), measurement of risk, and risk evaluation. Ensure that the identified risks are prioritized based on their probable impact and occurrence, and leverage help from supporters to minimize those impacts.
Read the full article at: http://www.apm.org.uk/news/maximising-value-stakeholders-through-risk-management