Risk Management

In the past, it was common to think that for every risk there is someone in the organization was responsible for, whether they had a specific role or a specific department, and that crises most often occurred due to irresponsibility at the top of the organization, strategic deficiencies and transparency problems to the lower echelons.

Today, we understand that risk management is a process that concerns everyone, from the CEO down to the organization hierarchy.

The current understanding of the overall responsibility of the entire organization results in rigid expectations from all stakeholders that are regarding corporate discipline demonstration, and the control over all the elements of the organization.

In business, risk management is defined as a process of identifying, monitoring and manipulating potential risks in order to minimize their negative impact on the organization. An effective risk management process will help to identify the risks pose the greatest threat to the organization and even provide guidelines for dealing with them.

Effective risk assessment and analysis of an organization helps protect assets, improve decision-making and optimize operational efficiency to save money, time and resources.

The risk management process is conducted using the ERM method and consists of four parts:

1. Risk Assessment: Evaluate the organization’s exposure to uncertain events that could affect its ongoing operations, and also to assess the potential damage that could affect its income and reputation.

2. Risk Analysis: Comparison of the estimated risks against the risk groups that the organization has already tested. The risk groups can include costs, socio-economic factors, legal requirements, and deficiencies.

3. Building a response procedure: Risk management is the implementation of policies and procedures that will help prevent or minimize the risks and consequences.

4. Business continuity management: Implementing work procedures, building a process of learning lessons and examinee the level and amount of risk ideal for the various situations in which the organization manages.