risk management template

Risk management is the identification, assessment of risks to minimize, monitor, and control the uncertainties. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes etc. Building a risk management template is the first step for companies or individuals to manage risk level.

Risk Management Overview

Risk management is crucial for the success of company management as organizations may face potential and unexpected loss from risks, the general risk management strategies is risk reduction or risk avoidance. companies may transfer the risk to another party, avoid the risk, reduce the negative effect of the risk, or accept the consequences of a particular risk.

Companies and organizations may face various risks. the biggest challenges facing companies is to prioritize the risk, ideally, the risks with the greatest loss and the greatest probability of occurring are handled first, risks with lower probability of occurrence and lower loss are handled later. In practice the process can be very difficult as the probabilities and losses of risk are subjective.

In handling the potential risk, organizations need to first identify the source and problems of the risk. After the source and problems of risks have been identified, they must then be assessed as to their potential severity of loss and to the probability of occurrence. These quantities can be either simple to measure, in the case of the value of a lost building, or impossible to know for sure in the case of the probability of an unlikely event occurring. Therefore, in the assessment process it is critical to make the best educated guesses possible in order to properly prioritize the implementation of the risk management plan.

Risk management Template

During the course of developing your personalized risk management template, it is important to consider the risk management process and key elements evolved in managing risks

Risk Management Template Style: you should consider your company or institutions requirement and policy and the field of risk management to determine your risk management template style

Risk Management Template Format: you need to consider the key elements in the risk management

* Risk identification section: the section typically involves the development of an inventory or database of relevant risks, based both on own knowledge, industry Experience and available tools.

* Risk assessment section: this section involves determining the likelihood of occurrence associated with each risk, as well as the scale of the resulting possible loss. Each may be assessed on a scale.

* Risk control section: this part determines whether the risk is accepted, transferred, avoided or controlled, and what risk controls are put in place.

* Risk monitoring section : the risk monitoring part is an ongoing process of monitoring high-level indicators like Portfolio at Risk (PAR) for general indicators, as well as the specific key indicators identified with each risk.

In addition to the above section, your risk management template should have Daily Risk Management at Business Unit Level, auditor feedback and company relevant risk policies.