Professional Documents
Culture Documents
Possibility
that
opportunities
will not be realized.
Possibility
that threats
will be materialized or
error will be made.
2
Ignoring
substantial
threats.
3
Believing that the
pursuit of low risk
exposure is the
same as managing
risk.
Types of Risks
Type of Risk
Business
Liquidity
Performance
Hazard
Categories of
Risks
Securities
Physical
commodities
Currencies
Strategies
Organization
Staffing
Technology
Image &
marketing
Markets
Companies
Counterparty
Insuree
(liability)
Property &
casualty
Life and
health
Principal
Causes
Supply and
demand
changes
(basis)
Expected
market
conditions
(time)
Management
judgment
Limited
information
Competitor
action
Changes in
customer
needs
Capacity
(volume)
constraints
System
failure
Unequal
information
Employee
error/theft
Management
actions
Business
failure
Employee
illness
Acts of nature
Accidents
Engineering Risks
Economic Risks
Political Risks
Exploration risk
Scarcity risk
Technological risk
Price fluctuation
Monetary risks
Competition risk
Communicate
issues clearly
Risk
Management
Risk
Measurement
Risk
Identification
Risk
Reporting
VH
VH
VH
VH
VH
Moderate
VH
Minor
VL
Insignificant
VL
Impact
Major
VL
VL
Very High
Urgent action to be taken that will
reduce the level of risk to tolerable
or less.
High
Detailed action plans required
that will reduce the level of risk to
tolerable or less.
Tolerable
Managed by keeping under
review and through continued
good practice.
Low
Manage through continued good
practice.
Very Low
No action required.
Probability
Impact VS Probability
High
I
M
P
A
C
T
Medium Risk
Share
Accept
Low
High Risk
Medium Risk
Control
PROBABILITY
High
Treat Risks
Choices
Far
Exceeds
Avoid
Transfer
Reduce
Accept
High
Exceeds
Consistent
Management Believes
It Can Effectively
Manage
Not
Manage
Risk to Company
Strategy
Core
Not Core