The document discusses key concepts in risk management for organizations. It emphasizes taking a balanced approach to risk management that focuses on prioritizing work, facilitating communication, and managing rather than avoiding risks. An effective risk management program deals with risks systematically across an organization and with partners, and remains nimble to address new issues while leveraging opportunities from risks.

1. Richard Anderson Some thoughts on risk management ...

2. The risk intelligent organisation Risk management is about bringing a perspective to the management of complicated issues in complex organisations . It is about the management (and not the avoidance ) of risk. It helps to prioritise your work and that of others in a fast moving context with an approach that is better than simple intuition and which facilitates communication between people . It is a style of thought , and is definitely not a paper chase .

4. The risk agenda Big Ticket Agenda Internally Driven Agenda Externally Driven Agenda Disaster Risk Compliance Risk Strategic Risk Operational Risk Small Ticket Agenda

5. Risk descriptions – the model Context Event Consequences Objectives

8. And doing the right amount of each Zone 3 Dead Zone Zone 1 Dead Zone Zone 2 Performance Zone Long Term Performance Low High Low High (i) Managed Risk Taking or (ii) Avoiding Pitfalls or (iii) Performance Culture or (iv) Corporate Ethics and Behaviours Attribute:

9. Performance Culture Corporate Ethics Avoiding Pitfalls More Managed Risk Performance Zone Dead Zones Balanced risk

10. Performance Culture Corporate Ethics Avoiding Pitfalls More Managed Risk Performance Zone Dead Zones Enron? Or the Big Banks?

11. Performance Culture Corporate Ethics Avoiding Pitfalls More Managed Risk Performance Zone Dead Zones UK plc?

12. The objective Performance Culture Corporate Ethics Avoiding Pitfalls More Managed Risk Performance Zone Dead Zones

14. Objectives, Risks and Controls Objective Risk D Objective Risk A Risk B Risk C Control 1 Control 2 Control 3 Control 4 Risk to more than one objective Control to more than one risk

15. Objectives, Risks and Controls Department A’s: Department B’s: Objective Risk D Objective Risk A Risk B Risk C Control 1 Control 2 Control 3 Control 4 Risk to more than one objective Control to more than one risk Who owns Control 4? Who has a guardianship interest?

16. Objectives, Risks and Controls Your Company Other Company Objective Risk D Objective Risk A Risk B Risk C Control 1 Control 2 Control 3 Control 4 Risk to more than one objective Control to more than one risk Who owns Control 4? Who has a guardianship interest?

17. Managing the linkages Objective Drivers Programmes Projects/Activities Risk Response Monitoring Internal External The relationship between objective, risk and response can be linked internally, or externally, where a third party takes on the responsibility.

24. Exercising control THE ELEMENTS OF CONTROL Likelihood Impact Individuals Organisation Information Planning Action Managers Regulators Cultures Specific General Strategy People Tasks Drivers Detail THE FIVE DIMENSIONS OF CONTROL

26. And back again… Establish Guardians An iterative process Start with the risk Identify type Establish rationale Develop response Common Specialist Unknown More managed risk Avoiding Pitfalls Performance Culture Corporate Ethics Strategy People Detail Tasks Drivers Monitor response Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Context Event Consequences Objectives Other interested stakeholders

27. And back again… Establish rationale Establish Guardians Start with the risk Identify type Develop response Monitor response Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 An iterative process

29. Individuals: What we look at Risk Management Maturity Fast Clockspeed Risk Management Process Maturity Ethics and compliance

30. Corporately: What we look at Training, tone from the top etc Heuristics, Churn, Complexity, Automaticity Tools at fingertips Linkages to objectives and clarity of purpose

31. Disaster-prone companies Top Indicators of a Disaster-Prone Organisation Blame Culture Complexity Bad Comms Tight Coupling Poorly Defined Goals Over Confidence Internally focussed Involuntary Automaticity Poor Information Time

33. Contact details [email_address] www.randerson-assocs.co.uk +44 (0)7703 503196 Richard Anderson