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RISK MANAGEMENT FRAMEWORKS - Coggle Diagram
RISK MANAGEMENT
FRAMEWORKS
ISO 31000
INTERNATIONAL STANDARD
Published in 2009
ISO 31000 describes a framework for
implementing risk management, rather than
a framework for supporting the risk
management process.
COMPONENTS
:
Mandate and commitment by the Board
Design of Framework
Implement Risk Management
Monitor and Review Framework
Improve Framework
Risk treatment is presented in ISO 31000 as the activity of selecting and implementing appropriate control measures to modify the risk.
ISO 31000 recognises the importance of feedback by way of two mechanisms. These are 1. Monitoring and Review of performance and 2. Communication and Consultation.
Communication and consultation is presented in ISO 31000 as part of the risk management process, but it may also be considered to be part of the supporting framework.
Reporting and disclosure are only very briefly mentioned in ISO 31000 and they are not included in the process shown in Figure 3. Also, the monitoring and review feedback activities set out in ISO 31000 do not explicitly mention the tasks of monitoring risk performance and reviewing the risk management framework.
ISO 31000 does not recommend a specific risk classification system and each organisation will need to develop the system most appropriate to the range of risks that it faces.
Organisations will need to define their own measures of likelihood of occurrence and consequences.
ISO 31000 refers to this structure as the risk management context.
COSO ERM
INTERNATIONAL STANDARD
Published in 2004
Enterprise risk management enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value
COMPONENTS
Internal Environment
Objective Setting
Event Identification
Risk Assessment
Risk Response
Control Activities
Information and Communication
Monitoring
KING IV PRINCIPLE 11
SOUTH AFRICAN STANDARD
The King III report came into effect in 2009.
King IV is the 4th edition of that report.
It sets out the philosophy, principles, practices and outcomes for corporated governance in South Africa.
COMPONENTS
Integrated Thinking
Corporate Citizenship
The organisation as an integral part of society
Stakeholder inclusivity
Sustainable Development
The King IV Code recommends that the Risk Committee comprises a majority of Non-executive members of the governing body
Triple Context - Combined context of the economy, society and environment.
The Six Capitals - Identifies financial, manufactured, intellectual, human, social and relationship, and natural capitals.