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IABFM Articles > > Risk Management > Steps for risk investigation
Steps for risk investigation
By Michael Vincent
28 December, 2006
Boards, Audit Committees and general management should utilise the following steps to facilitate risk and its management.
Ernst and Young have undertaken a study that demonstrates the factors.
Risk management needs to address whole-of-business risk, not just insurable or auditable risks.Risk management systems must report the emergence of new risks and the impact on existing risks of changing business conditions.The entire management team needs to take responsibility for the identification and assessment of risk rather than delegating it to a risk manager or internal audit.A common definition of what constitutes risk needs to be developed for each organisation to ensure consistent understanding.What constitutes an acceptable level of risk for each organisation needs to be defined - some will be more risk-averse than others.Risk management systems need to be capable of reporting risks that fall outside acceptable criteria.Risk management needs to be an ongoing concept, not something that is addressed periodically.Risk management policies should be developed and communicated throughout the organisation.About the Authors
Director
Australasian Risk Management Unit
Faculty of Business and Economics
Monash University
