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Implementing an effective risk management strategy based upon knowledge

Implementing an effective risk management strategy based upon knowledge. Peter Scott. What is Risk?. “Chance of bad consequences”. The concise Oxford Dictionary. What is Knowledge?. “The sum of what is known” The concise Oxford Dictionary. An integrated strategy. Knowledge

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Implementing an effective risk management strategy based upon knowledge

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  1. Implementing an effective risk management strategy based upon knowledge Peter Scott

  2. What is Risk? “Chance of bad consequences” The concise Oxford Dictionary PETER SCOTT CONSULTING

  3. What is Knowledge? “The sum of what is known” Theconcise Oxford Dictionary PETER SCOTT CONSULTING

  4. An integrated strategy Knowledge Management Risk Management PETER SCOTT CONSULTING

  5. Operational People Reputational Regulatory Asset IT Financial Economic, political, fiscal Competition /business Law Firm Risks Management PETER SCOTT CONSULTING

  6. Risk/KM • Risks are inter-related • Failure to manage knowledge involves widespread risk • KM is an essential part of an integrated risk management strategy PETER SCOTT CONSULTING

  7. Example: Reputational Risk • Operational • People • Regulatory • IT Competition & Business Markets • Economic, Political & Fiscal • Financial • Assets • Interaction with Knowledge/KM? PETER SCOTT CONSULTING

  8. Operational People Reputational Regulatory Asset IT Financial Economic, political, fiscal Competition /business Law Firm Risks Management PETER SCOTT CONSULTING

  9. Management Risks Is your management in control of its knowledge and managing your risk? PETER SCOTT CONSULTING

  10. Your Risks? • Where does the knowledge relating to your risks reside? • Can you access it? • Can you capture it? • Can you maintain and upgrade it? PETER SCOTT CONSULTING

  11. DIAGNOSIS Identification and assessment MITIGATION Control, transfer and avoidance MONITORING Tracking and reporting When a risk crystallises LIMITATION Minimising the effect of crystallised risks Implementing a Risk Strategy PETER SCOTT CONSULTING

  12. Risk Identification Involves: • Being management driven • Brainstorming • Facilitated discussions • Questionnaires • Top down/bottom up PETER SCOTT CONSULTING

  13. Set criteria for assessing risks Identify detailed risks Assess severity of detailed risks Identify high level risks Assess severity of high-level risks Risk map Risk summary Risk Diagnosis PETER SCOTT CONSULTING

  14. Risk Assessment • Incidence - probability • Impact - severity PETER SCOTT CONSULTING

  15. Risk Mapping PETER SCOTT CONSULTING

  16. Risk Mitigation Designed to: • Reduce • Avoid • Accept • Transfer PETER SCOTT CONSULTING

  17. Residual risk summary Consider impact/probability correlation Contingency plan requirements Risk map Insurance requirements summary Consider available mitigation techniques Required controls summary Risk summary Risk mitigation PETER SCOTT CONSULTING

  18. Monitoring involves • Tracking and reporting • Comparing actual outturns to preset indicators • Confirming effectiveness of risk responses • Reporting compliance and exceptions PETER SCOTT CONSULTING

  19. Required controls summary Contingency plan requirements Insurance requirements summary Annual Risk Management Report Set risk indicators and methods to monitor them Risk monitoring PETER SCOTT CONSULTING

  20. Limitation involves • Risk crystalisation scenarios • Contingency plans • Limitation procedures • Post event assessment PETER SCOTT CONSULTING

  21. Use of IT Use an integrated risk management system to quantify, assess and control risk by : • streamlining diagnosis, mitigation and monitoring • embedding common risk management procedures • providing information access to all who need it • creating and maintaining one central, up to date risk database PETER SCOTT CONSULTING

  22. Example – Risk Summary – an overview of risks PETER SCOTT CONSULTING

  23. Example – Detailed Risks PETER SCOTT CONSULTING

  24. Example - Controls PETER SCOTT CONSULTING

  25. Example - Questionnaires PETER SCOTT CONSULTING

  26. Example – Final Evaluation PETER SCOTT CONSULTING

  27. Advantages of a formal risk management process? • Structured approach focuses on key risks • Elimination of redundant procedures • Comfort / assurance to PI insurers • Universal application to all risk areas • Continuous monitoring ensures management of risk is “lived” day to day PETER SCOTT CONSULTING

  28. Knowledge Management Risk Management Risk/KM PETER SCOTT CONSULTING

  29. DIAGNOSIS Identification and assessment MITIGATION Control, transfer and avoidance MONITORING Tracking and reporting When a risk crystallises LIMITATION Minimising the effect of crystallised risks Implementing a Risk Strategy PETER SCOTT CONSULTING

  30. Any questions? PETER SCOTT CONSULTING

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