Risk Management can be seen as a four-stage process outlined below. Each element is a vital link in the chain and muct be implemented correctly in order to be effective. We can help you acheive that goal.
Risk Identification - The identification process centers on defining and identifying all of the firm's (or specific projects) actual, perceived, or anticipated risks. This might encompass many financial and operating risk drivers, implying a significant degree of complexity. We will work with you to help you understand the risks and we will identify all types and sources of risks, including the ones that are unique to your business. This stage of the process is vital, as failure to properly identify all financial and operating risks impacting your firm (or project) may lead to 'surprise' losses.
Risk Quantification - The quantification process determines the financial impact (including delays in the project) that risks can have on business operations. Specific techniques for measuring the financial impact of risks vary widely, and depend largely on the nature of the underlying business activity.
Risk Management - After the risks have been identified and quantified, they must be managed. Through the core process of active decision-making, we help our clients to decide whether and how they will control, retain, reduce, transfer or expand their exposures.
See also Project Control and Disaster Risk Reduction.
Risk Monitoring - Once the firm has decided how to manage its risk profile, it must actively monitor its exposure. This means regularly tracking and reporting both risks and risk decision experiences, and communicate information internally and externally so that interested parties (e.g. executive management, board directors, regulators, creditors and investors) are aware of any possible upside or downside. Good monitoring process feeds back into Risk Management and drives required changes and improvements.