What is Risk Management? What are the Steps in Risk management process? | GRC
Governance Risk & Compliance (GRC)・3 minutes read
Risk management involves identifying, assessing, and mitigating various risks through structured processes, with a focus on high-impact and high-likelihood risks. The risk management function reports exposures and capital allocation positions to senior management, including the CEO and the board, to effectively monitor and mitigate risks.
Insights
- Risk management involves identifying operational, financial, compliance, and legal risks, assessing their impact and likelihood, developing mitigation plans, and ensuring capital availability for controls.
- The risk management function reports exposures, significance, and capital allocation to senior management, including the CEO and board, through a structured process of risk identification, assessment, mitigation, and monitoring.
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Recent questions
What are the key steps in risk management?
The key steps in risk management include identifying various types of risks, assessing their impact and likelihood, developing mitigation plans, ensuring capital availability, and implementing ongoing monitoring programs.
Who does the risk management function report to?
The risk management function reports exposures, significance, and capital allocation positions to senior management, including the CEO and the board.
What types of risks are considered in risk management?
Risk management considers operational, financial, compliance, and legal risks.
How does risk management assess risks?
Risk management assesses risks by evaluating their impact and likelihood in terms of financial implications and probability of occurrence.
Why is ongoing monitoring important in risk management?
Ongoing monitoring is crucial in risk management to effectively mitigate risks and ensure the success of risk mitigation plans and strategies.
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Summary
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Effective Risk Management Process for Senior Management
- Risk management process involves several key steps:
- Identification of various types of risks such as operational, financial, compliance, and legal risks.
- Assessing the impact and likelihood of each identified risk in terms of financial implications and probability of occurrence.
- Developing risk mitigation plans and strategies, especially focusing on high-impact and high-likelihood risks.
- Ensuring the availability of capital for implementing controls, with ongoing monitoring programs to mitigate risks effectively.
- The risk management function reports exposures, significance, and capital allocation positions to senior management, including the CEO and the board, following a structured process of risk identification, assessment, mitigation, and monitoring.
