Bsbrsk501B Risk Management

457 Words2 Pages
Assessment 1- Using AS/NZS ISO 31000:2009 Risk Management- Principles and Guidelines, define risk management. Risk management by definition is ‘coordinated activities to direct and control an organisation with regard to risk (Standards Australia 2009, p.2), herein known as ‘the Standard’. The Standard further defines the components which deliver a framework with which organisations can effectively manage risk. There are several principles of risk management which form the basis of this framework. These principles emphasize that the Risk Management process:- • Creates and protects value to the organisation • Is integral to all organisational processes • Forms part of the decision making process • Addresses uncertainty • Is systematic, structured and timely • Is based on the best available information • Is tailored • Takes into account human and cultural factors • Is transparent and inclusive • Is dynamic , iterative and responsive to change and • Facilitates continuous improvement Risk management requires a framework of design, implementation and monitoring to ensure its effectiveness in an organisation, through the development of a risk management plan. A risk management plan further describes the components and the specific approach and response of an organisation’s commitment to risk management. It involves an organisation identifying and defining the constituents of risk, whether derived from either regulatory requirements or identified sources of risk. A risk criteria is developed against the organisations values and objectives in preparation for assessment. Assessment of these risks requires three steps, identification, analysis and evaluation:- • Identification- The causes and consequences associated with the perceived risk must be identified, these risks may be determined through action or the inaction of an activity, the level
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