Risk Management

7514 Words Jan 23rd, 2011 31 Pages
Heinz‐Peter Berg – RISK MANAGEMENT: PROCEDURES, METHODS AND EXPERIENCES

RT&A # 2(17) (Vol.1) 2010, June

RISK MANAGEMENT: PROCEDURES, METHODS AND EXPERIENCES
Heinz-Peter Berg • Bundesamt für Strahlenschutz, Salzgitter, Germany e-mail: hberg@bfs.de

ABSTRACT
Risk management is an activity which integrates recognition of risk, risk assessment, developing strategies to manage it, and mitigation of risk using managerial resources. Some traditional risk managements are focused on risks stemming from physical or legal causes (e.g. natural disasters or fires, accidents, death). Financial risk management, on the other hand, focuses on risks that can be managed using traded financial instruments. Objective of risk management is
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1) This standard is intended to support existing industry or sector specific standards.

Figure 1. Approach of the planned generic standard on risk management.

As with the definition of risk, there are equally many accepted definitions of risk management in use. Some describe risk management as the decision-making process, excluding the identification and assessment of risk, whereas others describe risk management as the complete process, including risk identification, assessment and decisions around risk issues.

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Heinz‐Peter Berg – RISK MANAGEMENT: PROCEDURES, METHODS AND EXPERIENCES

RT&A # 2(17) (Vol.1) 2010, June

One well accepted description of risk management is the following: risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, acting on and communicating risk issues. In order to apply risk management effectively, it is vital that a risk management culture be developed. The risk management culture supports the overall vision, mission and objectives of an organization. Limits and boundaries are established and communicated concerning what are acceptable risk practices and outcomes. Since risk management is directed at uncertainty related to future events and outcomes, it is
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