Understanding Risk Management in Organizations
Risk management plays a crucial role in organizational success by addressing uncertainties, maximizing opportunities, and minimizing harm. This involves informed decision-making, embracing uncertainty for innovation, and a consultative team effort. Tools like Risk Register and ERM Dashboard aid in identifying and assessing risks across various aspects of operations. Effective risk management ensures a proactive approach to dealing with uncertainties and achieving objectives.
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Presentation Transcript
Risk Management
What is Risk? The effect of uncertainty on objectives. 2
Informed decision making NOT only for compliance What is Risk What is Risk Management ? Management ? Minimizing harm, maximizing opportunity NOT only considering negative effects Embracing uncertainty, enabling innovation NOT assuming we can predict the future A consultative process and team effort NOT a desk job of one person 3
BECOMING A RISK-INFORMED ORGANIZATION
UNDPs Integrated Approach to Risk Management Social and Environmental Financial Global Corporate Operational Unit/Programme Organizational Political Projects Regulatory Strategic Safety & Security
Risk Management Tools Risk Management Tools ERM Dashboard (Power BI) Capacity assessments of partners, including HACT UNDP Anti-Fraud Policy UN Programme Criticality Framework Security Risk Management (SRM) and Business Continuity Management Due Diligence for the Private Sector Programme/Project Quality Assurance - Dashboard Social and Environmental Standards and Screening Procedure Theory of Change Audits and Evaluations Procurement Ethics, Fraud and Corrupt Practices Policy, Procurement Strategy/Planning Procurement Risk Radar Crisis Risk Dashboard RISK REGISTER
UNDPs Risk Register Global Corporate Quantum+ Unit/Programme Projects Quantum
Things to remember about Risk Things to remember about Risk Uncertainty that Matters David Hillson QUICK TIPS Discussion between programme and operations Engage stakeholders Understand changing context Use available tools to identify and assess risks Link impact to objectives All risks are uncertainties, not all uncertainties are risks!
Risk re- assessment, treatment and Monitoring and reporting Risk Identification and Assessment Changing context
Quantifying Financial Impact Quantifying Financial Impact Financial impact is NOT: The opportunity loss that the organization suffers when the risk materializes The cost of prevention and risk mitigation measures Monetized amount of loss of productivity (e.g. staff time, running cost, etc.)
Costing Risk Management Costing Risk Management Needs to be considered in programme/project design Needs to be costed in budgets Includes necessary activities to implement treatment measures
