Page 52 - EBOOK RISK MANAGEMENT
P. 52
Table 5.1 Matrix in Selecting The Risk Management Methods
HIGH Risk retention and risk Risk avoidance and risk
Frequency
reduction
reduction
LOW Risk Retention Risk transfer
LOW HIGH
Severity
To implement the risk management programme, a firm must develop a risk
management policy statement which includes:
Risk management ojectives of the firm
The potential risk frequency and severity
The suggession of appropriate risk management techniques
The cost of risk management technique involved
5.3 Monitoring And Reviewing The Risk Management Programme
After risk management programme is implemented, there must be regular monitoring of the
programme. The risk management programme must then be reviewed and evaluated
periodically to determine whether the objective of risk management are being attained. An
effective risk management programme can help the organization inreducing risk if it is
carefully controlled. All parties in the organization must comply and adhere to its
requirements.
“Some risks that are thought to be unknown, are not unknown.
With some foresight and critical thought, some risks that at first
glance may seem unforeseen, can in fact be foreseen. Armed
with the right set of tools, procedures, knowledge and insight,
light can be shed on variables that lead to risk, allowing us to
manage them.”
- Daniel Wagner -
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