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Risk Management
Risk Assessment
Risk Audit and Compliance
Risk Management Overview
Risk is inherent in everything we do - managing business risk effectively is the key to sustainable business success. Risk
management is a systematic and iterative process of risk assessment, risk monitoring, risk treatment, audit and risk review. Risk
can arise in many areas such as when determining future business plans and strategies, running day to day operations, managing a
project, purchasing a new system or managing business finances. Risk management requires a risk framework, encompassing a holistic
approach to facilitate effective management of business activities and improve business performance, for both large and small
organisations.
Risk management is about identifying potential variations from what we plan or desire and managing negative risks to maximize
opportunity, minimize loss and improve decision-making. Risk management involves identifying and taking opportunities to improve
performance, as well as taking action to better manage risk and reduce the chances of something going wrong.
Implementation of effective risk management provides for:
- Better decision-making and planning;
- Identification of opportunities and threats;
- Exploitation of uncertainty and variability;
- Pro-active management;
- Effective allocation and use of resources;
- Enhanced incident management;
- Reduced losses;
- Enhanced stakeholder confidence and trust;
- Improved compliance with legislation; and
- Effective corporate governance.
The discipline of risk management has vast application across all industries and environments and represents best business practice,
underpinning the management activities of the most successful organisations worldwide. There are many areas of risk management
including, but not limited to security risk, credit risk, business risk, project risk, financial risk, trading risk, investment
risk, operational risk, market risk, environmental risk and information risk.
We all apply risk management principles in our day to day lives; we manage risks constinuously, sometimes consciously and quite often
sub-consciously. The need to apply risk management in a systematic manner to the management of risk throughout all areas and at all
levels of your business is of fundamental importance. The Australian and New Zealand Risk Management Standard (AS/NZS 4360:2004)
definition of risk management is the processes adopted to identify and take advantage of opportunities for
enhancing business and individual outcomes, as well as reducing negative impacts.
The definition of risk is the chance of something happening that will have an impact on objectives
(AS/NZS4360). The word risk is usually associated with a negative event or issue and risks are generally regarded as something
that should be avoided or minimised. However, activities involving risk are considered to have the potential for both positive
and negative outcomes.
Risk management is an integral part of good management. Managing risk is an iterative process of continuous improvement that is
best embedded into existing practices and business processes.