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Risk Management Frameworks - Coggle Diagram

- - - - Formulate the business risk management strategies
    - - Design/Implement the risk management process
    - - Assess the business risk = (1) Identify, (2) Source, (3) Measure
    - - Measure/Monitor the risk management process performance
    - - Establishing the risk management goals, objectives and infrastructure
    - - Continuously improve the business risk management process
  - - - Standardize the business process and collaborate efforts to integrate it.
      - Allocate resources more efficiently.
      - Eliminate unnecessary controls
    - - Better understand risks and improve risk management capabilities across business functions and units.
      - Improve strategic management and business planning processes.
      - Manage KPI shortfalls and tightened margins.
      - Expand and improve corporate governance, addressing expectations of and requests from the board (including reporting needs).
    - - Identify, assess and manage emerging external risks, including regulatory changes, access to capital and financial market volatility
      - Evaluate and manage risks associated with strategic business decisions (product/service offerings, etc.).
      - Incorporate operational risk management best practices
      - Respond effectively to low probability critical/catastrophic risks (e.g., Black Swan).
- - - - Principle 7 – the Governing Body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its roles and responsibilities objectively and effectively;
      - Principle 8 – the Governing Body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties;
      - Principle 9 – the Governing Body should ensure that the evaluation of its own performance and that of its committees, its chair and individual members supports continued improvement in its performance and effectiveness
      - Principle 10 – the Governing Body should ensure that the appointment of and delegation to management contribute to role clarity and the effective exercise of authority and responsibility.
      - Principle 6 – the Governing Body should serve as the focal point and custodian of governance in the
        organisation
    - - Principle 12 – the Governing Body should govern technology and information in a way that supports the organisation in setting and achieving its strategic objectives (separation of technology and information – in King IV is to emphasize that information should be recognised as a corporate asset and confirms the need for governance structures to protect and enhance information in line with POPI requirements);
      - Principle 13 - the Governing Body should govern compliance with applicable laws, non-binding rules, codes and standards in a way that supports the organisation being an ethical and good corporate citizen;
      - Principle 11 – the Governing Body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives;
      - Principle 14 - the Governing Body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote achievement of strategic objectives and positive outcomes in the short medium and long-term;
      - Principle 15 - the Governing Body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports
    - - Principle 4 – the Governing Body should appreciate that the organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process (six capitals)
      - Principle 5 – the Governing Body should ensure that reports issued by the organisation enable stakeholders to make an informed assessment of the organisation’s performance and its short, medium and long-term prospects (sustainability).
    - - Principle 16 – in the execution of its governance role and responsibilities, the Governing Body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time (approve policies, oversee management of stakeholder
        relations, delegate to management to implement and disclose relevant information, AGM attendance, Group Companies governance structures);
      - Principle 17 – the Governing Body of an institutional investor should ensure that responsible investment is practiced by the organisation to promote the good governance and creation of value by the companies in which it invests (only apply if relevant).
    - - Principle 2 – the Governing Body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture (policy setting, oversight of ethics and disclosure of ethics performance);
      - Principle 1 – the Governing Body should lead ethically and effectively (integrity, competence, responsibility, accountability, fairness and transparency);
      - Principle 3 – the Governing Body should ensure that the organisation is, and is seen to be, a responsible corporate citizen (setting direction, overseeing and monitoring, compliance, disclosure including consequence of outputs from their value chain).
- - - - selecting the 8most appropriate risk treatment* option(s)
      - designing risk treatment plans specifying how the treatment options will be implemented
    - - risk analysis of the nature and characteristics of risk, including the level of risk, risk sources, consequences, likelihood, events, scenarios, controls and their effectiveness
      - risk evaluation to support decisions by comparing the results of the risk analysis with the established risk criteria to determine the significance of risk
      - risk identification to find, recognise and describe risks that might help or prevent achievement of objectives and the variety of tangible or intangible consequences
    - - identifying the external and internal context for the organisation
      - defining risk criteria by specifying the acceptable amount and type of risk
      - defining the purpose and scope of risk management activities
      - defining criteria to evaluate the significance of risk and to support decision-making
    - - improving the quality and effectiveness of process design, implementation and outcomes
      - monitoring the RM process and its outcomes, with responsibilities clearly defined
      - planning, gathering and analysing information, recording results and providing feedback
      - incorporating the results in performance management, measurement and reporting activities
    - - communicating risk management activities and outcomes across the organisation
      - providing information for decision-making
      - improving risk management activities
      - providing risk information and interacting with stakeholders
    - - ensuring different views are considered when defining risk criteria and evaluating risks
      - providing sufficient information to facilitate risk oversight and decision-making
      - bringing different areas of expertise together for each step of the RM process
      - building a sense of inclusiveness and ownership among those affected by risk
  - - - articulating risk management commitment and allocating resources
      - understanding the organisation and its internal and external context
      - establishing communication and consultation arrangements
    - - developing an appropriate implementation plan including deadlines
      - identifying where, when and how different types of decisions are made, and by whom
      - modifying the applicable decision-making processes where necessary
    - - determining management accountability and oversight roles and responsibilities
      - ensuring risk management is part of, and not separate from, all aspects of the organisation
    - - measuring framework performance against its purpose, implementation and behaviours
      - determining whether it remains suitable to support achievement of objectives
    - - establishing the amount and type of risk that may or may not be taken (risk appetite)
      - making necessary resources available for managing risk
      - issuing a statement or policy that establishes the RM approach, plan or course of action
      - aligning risk management with the strategy, objectives and culture of the organisation
    - - continually monitoring and adapting the framework to address external and internal changes
      - taking actions to improve the value of risk management
      - improving the suitability, adequacy and effectiveness of the RM framework