Definition of Risk ManagementHaving chickened out of providing a definition of Risk Management on the previous page, I have taken expert advice… Thanks Wikipedia And have chosen the following Risk Management definitions for the risk areas that we focus upon (Enterprise Risk, Operational Risk, Strategic Risk, Corporate Risk – the executive level risk frameworks and methodologies for managing all the individual risks facing businesses every day) Wikipedia Define Risk Management as… “There are many definitions of risk that vary by specific application and situational context. Risk is described both qualitatively and quantitatively. Qualitatively, risk is proportional to both the expected losses which may be caused by an event and to the probability of this event. Greater loss and greater event likelihood result in a greater overall risk. Frequently in the subject matter literature, risk is defined in pseudo-formal forms where the components of the definition are vague and ill-defined, for example, risk is considered as an indicator of threat, or depends on threats, vulnerability, impact and uncertainty”. In engineering, the definition of risk is:Risk = (Probability of Accident) x (Losses per Accident)
My favorite Risk Management Definition – not sure who to credit for this one – sorry… “The selection of those risks a business should take, and those which should be avoided or mitigated, followed by action to avoid or reduce risk.” And there are many, many, more Definitions of Risk Management out there… As my focus is on Enterprise Risk Management (ERM), I will again use Wikipedia to define it. “Enterprise risk management is the process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effects of risk on an organization's capital and earnings. Enterprise risk management expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks.” For those of you wish to explore the definitions of Risk Management in more detail the following links will help… Go to thefreedictionary.com /Risk+Management http://en.wikipedia.org/wiki/Enterprise_Risk_Management Definition of the COSO integrated Enterprise Risk Management Framework http://www.coso.org/ERM-IntegratedFramework.htm Some excellent Risk Management guides published and free courtesy of Protiviti http://protiviti.com/portal/site/pro-us/menuitem.8b5ea5c82fb6ef61bb078e9ca7cebfa0
The following links are to the major global Enterprise Risk Management Associations. Great sources of Risk Management info... The Institute of Risk Management http://www.theirm.org The Institute of Operational Risk (IOR)A HREF="http://www.ior-institute.org ">http://www.ior-institute.org Association of Insurance Risk Managers http://www.airmic.com The Risk Management Association http://www.rmahq.org Federation of European Risk management Associations http://www.ferma.eu The Global Association of Risk Professionals (GARP)- Association consisting of over 76,000 individuals around the world who are involved in financial risk management. http://www.garp.com COSO Enterprise Risk Management is recognized the world over for providing guidance on critical aspects of organizational governance, business ethics, internal control, enterprise risk management, fraud, and financial reporting… http://www.coso.org
OpRisk and Compliance - A really good UK monthly publication, with electronic archives.
http://www.opriskandcompliance.com
Risk Management - an excellent US publication
http://www.rmmag.com
Strategic Risk - great UK risk management publication with full online access
http://www.strategicrisk.co.uk
Continuity Insurance & Risk Magazine UK subscription publication
http://www.cirmagazine.com
International Risk Management Institute – huge resource of Risk and Insurance related information for industry
http://www.irmi.com
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