Operational Risk Management - Assessing & Mitigating risk is critical.
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3. Overview
• What is ORM
• Applicability
• Principles
• The five steps
• Risk matrix
• Example
4. What is ORM?
Risk management is the process of identifying, assessing, and
controlling risks arising from operational factors and making
decisions that balance risk costs with mission benefits.
Risk is characterized by both the probability and severity of a potential
loss that may result from hazards.
5. Applicability
Risk management assists management in:
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Conserving resources and avoiding unnecessary risk.
Making an informed decision
Identifying feasible and effective control measures where specific standards do not exist.
Risk management does not:
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Inhibit the management's flexibility and initiative.
Remove risk altogether, or support a zero defects mindset.
Require a GO/NO-GO decision.
Remove the necessity for standard practices.
7. The five steps
1. Identify hazards
2. Assess hazards to determine risk
3. Develop controls and make risk decisions
4. Implement controls
5. Supervise and evaluate