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Objective
: identify and rank all the
risks systematically so as to obtain a comprehensive risk
mapping
The
identification and evaluation of risks is a key element in
the risk management strategy. A detailed risk audit has to
be carefully carried out in order to get a fair and true view
of the risks that may threaten the survival of the company
and to draw a comprehensive risk mapping, that will serve
as an indispensable background to all further actions with
regard to risks.
Therefore
a rigorous method is needed to define risks appropriately
by identifying potential impacts, triggers and accelerators
that influence the "value" of a risk:
- INDICATORS
point out the impact that a risk can have in various dimensions,
assessing each risk with regard to its strategic importance,
qualitative and quantitative aspects, duration, etc.
- TRIGGERS
are the factors, that can lead to a risk materialising,
for example a lack of control or awareness, the quality
of evaluation, etc.
- ACCELERATORS
are the factors, that influence the extent of the damage
and have an effect on the response to risk, among these
we can identify the detection time, the dynamics between
events, the way a crisis is handled,etc.
Additionally
a review of existing measures and processes is necessary to
mitigate the identified risks . Once these two intermediate
results have been compared, any gap that may exist will be
identified and treated with selected measures.
This enables us to model the risks in
a qualitative manner and to
- Define
priorities
- Outline
necessary measures
- Estimate
the costs
- Determine
the needs for action
- Establish
a reporting system
The
major concerns of companies are:
- Completeness
of risk inventory
- True
value calculations for potential impacts
- Accuracy
of probability assumptions
- Origins
of risks
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