Page 18 - EBOOK RISK MANAGEMENT

The range of activities undertaken by risk managers includes involvement with

another department as well such as:

Operational Financial
Audit committees
Department Department

Project
Strategic Planning
Management

Figure 2.1 Other Departments in Organization

Centralization of risk management department.

Benefit

Facilitates effective interaction between risk manager
and senior management

Limitation

Less concern for risk management among managers
and employees

Figure 2.2 Benefit and Limitation of Centralization

Advantages of having Risk Management Department in an organization:

 It encourages the company to consider its threats. Risk management, in
particular, encourages it to examine risks that could otherwise be neglected.

 It encourages the firm to be better prepared by clarifying the risks. In other

words, it assists the company in better managing itself.
 It allows the company to prioritise its investments and reduces internal

disagreements over how money should be spent.

 It decreases the number of systems that are duplicated. One example is the
integration of environmental, health, and safety systems.

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