Unit 3 Flashcards
(14 cards)
Elephants
Known-Unknown (unmanaged)
know the risks but ignore/not formalised (should be in the risk register)
Surprise
Unkown Unkown (unmanaged)
we do not know what we do not know (black swans)
Facts
Known Known (managed)
We know what we know - normally has happened - risk events
No risks-no uncertainty
Acknowledged Risks
Unkown known (managed)
We know what we do not know (uncertain regarding the likelihood)-should be in the risk register
Risk Proximity/ definition and disadvantage
How close we are to risk occurring - how soon can happen
Disadvantage: If has a distant proximity and managed now the threat will have a lower probability of occurrence and lower impact (e.g. climate change will be rated lower than the future impact)
Risk Velocity
How fast a risk can impact an organisation once it occurs (timescale of risk impact)
Risk clock speed
The rate at which the info necessary to understand the risk become available
Slow: Enough thinking is available
Fast: At or close to real time
Risk clock peed window: range between how well orgs can deal with fast and slow clock speed risks and still function effectively
(short term: in case of insurable risks, the nature and consequences of the event may be understood, but the timing of the event unpredictable
Residual (design)
level of risk as if the current controls were working effectively and/or taking account of additional planned actions to manage the risk
Response to risks: what each of these risks do to uncertainty? hazard/control/opportunity risk
hazard: reduce exposure
control risk: reduce uncertainty
modify the investment
tolerate the risk: no further action
HILP Risks
High Impact - Low probability - usually ignored (e.g. COVID) - black swans: extremely rare with severe consequences and unpredictable
HILP: rare but foreseeable with catastrophic potential (know but ignored- unlike black swans - some defences exist)
Risk Capacity definition
The resources incl financial, intangible and human which an organisation is able to deploy in managing risk
Risk management maturity definition
The level of skills, knowledge and attitudes displayed by people in the org combined with the level of sophistication of RM processes and systems in managing risk within the organisation
Propensity (ταση) to take risk
the extent to which people in the org are predisposed to understanding activities. The Impact, Timing, Likelihood of which are unknown and which is influenced by financial, cultural, performance and ethical consideration
Propensity to exercise control
the extent to which people in the org are predisposed to take steps to change the Impact, likelihood, timings OF RISKS INFLUENCED BY FINANCIAL, CULTURAL PERFORMANCE AND ETHICAL CONSIDERATIONS
