Furbi &

Friends
13/11/2015
There are three steps management should take when building risk management capabilities: Asses risk and
develop responses, Design and implement capabilities, continuously improve capabilities
Management can pilot components of a suggested process for a given risk or at a given unit to test application
and acceptance before deciding to deploy them across the organization.
Risk assessments can be improved in many ways. The most effective risk assessments are designed to provide
quality inputs to risk response planning. Other possible improvements include: providing resources for identifying,
assessing and managing risks, creating an open environment which encourages discussion of common risks
across the enterprise, etc.
However, objective-setting occurs when management sets strategic objectives, event identification occurs when
management identifies potential events that may positively or negatively affect an entitys ability and risk
assessment occurs when management considers qualitative and quantitative methods to evaluate the likelihood
an impact of a potential events, individually or by theme or category, which might affect the achievement of
objectives.
An effective enterprise wide risk assessment process is needed to identify priority risks, unacceptable gaps
relating to priority risks provide a basis for articulating the value proposition of advancing an organizations ERM
infrastructure.
Following risk assessment, specific risk responses are developed. As indicated by COSO, there are four
fundamental choices, the first is eliminate the risk by preventing exposure to future possible events from
occurring, the second maintain the risk at its current level, the third implement policies and procedures to lower
the risk to an acceptable level and the last one, shift the risk to a financially capable independent counterparty.
The dashboard or scorecard reporting is flexible enough to enable the design of reports to address specific
needs, one function of a dashboard is to aggregate data and information about risk that are difficult to quantify.
The continuous improvement is applied to risk management to successful because facts and circumstances are
constantly changing over time.
The difference between ERM and quality initiatives y that ERM is enterprise-level process that is integral to
strategy-setting, on a another hand quality initiatives provide the methodology and tools to help organizations
understand , measure and continuously improve the efficiency and quality of their process at a detailed level.
There are several ways to measure risk using some combination of a rigorous methodology and the application of
judgment, like: Risk-pooling approaches, enterprise wide appetite and specific risk tolerances, hurdle rates, at risk
frameworks and risk-adjusted performance measurement.
Help managers make better choices in protecting and enhancing enterprise value so we should
complete our strategic planning process with our enterprise wide risk assessment. In the other way
we must reevaluate to consider important risk identified during the risk assessment.