The aim of risk documentation is to provide security and information to users, such as management, so that they can make effective decisions (HB 436:2013, pp. 88). AS/NZS ISO 31000:2009 is the standard for risk management principles and guidelines in Australia (HB 436:2013, pp. 2). HB436:2013 provides guidance to the application of AS/NZS ISO 31000:2009 (HB 436: 2013, pp.2). In 2013 HB436:2004 was updated, one of the new changes states that risk management practices should be able to traceable, however, a complete log or record of risks is not necessarily required (HB436:2013, pg. 88). This essay will discuss the potential risks and potential decrease in risks which may result due to more flexible documentation options.
Many managers make
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It could be hard for stakeholders to understand risks if there is no clear documentation of particular risks.
For risk management is to be effective, it has to be measured, reviewed and monitored (ISO AU/NZS 31000:2009, pp 14). This could also be very difficult without a good understanding of each particular risk.
It is important for organisations to have a good understanding of their risks because they are often held liable for the actions of their employees (Fadun 2013). If risks are not well documented, it would be very difficult for different employees as well as management to all have the same understanding of the risks that face the organisation. If risks are not understood, they cannot effectively be prepared for or monitored.
Risk disclosure reduces uncertainty in investors, because it creates trusts between investors and the organisation (Ismail, Rahman & Ahmad 2013). If risks are not effectively disclosed and a risk eventuates as a result of inadequate planning, it can affect the financial outcome of an organisation, because investors will no longer trust them (Ismail, Rahman & Ahmad 2013).
Risk disclosure can also improve the quality of strategic planning (Ismail, Rahman & Ahmad 2013). If an organisation has to disclose a risk they may be more likely to plan more effectively for it, because they have acknowledged that it could be an issue.
Organisations usually only disclose information which
If a risk has been identified then it needs to be acted upon so as to minimise the level of risk involved. If this is not done then there is a higher level of risk and more chance of a negative outcome.
The purpose of risk assessment is not to remove risks, but to take reasonable steps to reduce them. The process involves looking at the risk, and considering what can be done to make it less likely that the risk will develop into a reality. This can be done through implementing policies and codes of practice, acting in individual’s best interests, fostering culture of openness and support being consistent, maintaining professional boundaries and following systems for raising concerns.
Whilst promoting independence and choice is key to good working practice maintaining a safe and secure environment is also important. Processes to allow risks to be taken include Planning, risk management; monitoring and recording of outcomes by not allowing risks to be taken consequently can lead to institutionalisation and an increase in dependence.
Enterprise Risk Management (ERM) is a series of processes used to identify risk, implement strategies to address risk, and monitor impact on the organization. Indeed, an effective ERM will consist of a corporate profile, which is a record of key risks that would hinder the organization in achieving their key objectives (Fraser & Simkins, 2010). Ideally, the risk profile is created as a tool to communicate with the Board of Directors, but may be used as a means of communication with all levels of management (Bethel, 2016). Typically, there are variations of the risk profile based upon the level of management, such as duration, types of risk, and purpose (Fraser & Simkins, 2010).
All risks should be identified on a risk assessment so they can be monitored and review
Importantly, the quality of the risk assessment is dependent on the quality of the information available. Sometimes the client’s situation requires urgent actions, and a complete assessment is not possible (Bland et al., 2009, p. 144).
However, companies generally adopt a methodology for overall risk assessment. Sometimes these methodologies involve the assignation of risk oversight to leaders in each area. The approach is based upon the assumption that each area knows itself best. However, this often overlooks potential issues in favor of confronting them after they develop. As the need for
We cannot assume all risks will be normal, we have to expect uncontrollable events. We cannot we have all the assumptions so must continually evaluate our risk management.
We will use risk management tools for formal risk analysis to uncovered several barriers organizations face when trying to implement these probabilistic approaches, including a lack of organizational support, a lack of procedures, a lack of technical expertise to implement and interpret outputs, and a lack of transparency amongst stakeholders. By focusing on overcoming these barriers through training employees will adopt the
In any organisation particularly health care risk management affects everybody, and each individual should be clear about their responsibilities for managing risks. Responsibilities should therefore be specified in employee’s job descriptions or in relevant policies and procedural documents. The accountability frame work for risk
Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analyzing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. (Lecture notes)Risk Management is also described as 'all the things you need to do to make the future sufficiently certain'. (The NZ Society for Risk Management, 2001)
Risk and opportunities can be identified and explained, however, it is lack of details in analysis and mitigation measures.
Risk management is defined as the effort to avoid, reduce, control, or mitigate the risks deemed unacceptable. Uncertainties
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
Concept of risk, risk assessment, risk management and how uncertainty affects the process will be discussed.