Module 1 - Unit 1: Concepts and definitions of risk and risk management Flashcards Preview

International Certificate In Risk Management (IRM) - Updated 2020 > Module 1 - Unit 1: Concepts and definitions of risk and risk management > Flashcards

Flashcards in Module 1 - Unit 1: Concepts and definitions of risk and risk management Deck (13)
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1
Q

The ISO 31000 definition of a risk is?

A

The effect of uncertainty on objectives

2
Q

Describe the development of risk management

A

1950s: Escalating insurance costs

1960s-70s: Financial/Insurance based, hazard focused (e.g. H&S)

1980s: RM techniques applied to project management
1990s: Orgs consider ‘operational’ risks 2000s:

Rise of holistic ERM approach and specialisation e.g. clinical/energy,IT

3
Q

The difference between hazard, opportunity and control risks?

A

HAZARD: Pure - impact will be negative

OPPORTUNITY: Speculative - potentially positive impact

CONTROL: Speculative - impact is uncertain

4
Q

Three ways that risks can be attached?

A
  1. Objectives/stakeholder expectation (e.g. growth)
  2. Core processes (e.g. deliver healthcare)
  3. Key dependencies (e.g. commissioning arrangements)
5
Q

5 benefits of good RM?

A

MADE2!

  1. MANDATORY obligations are met
  2. ASSURANCE that significant risks are being managed
  3. DECISIONS are properly considered re. risk
  4. EFFECTIVE STOC processes
  5. EFFICIENT STOC processes
6
Q

RM helps improve an org’s STOC core processes. What does STOC stand for?

A

Strategy

Tactics

Operations

Compliance

7
Q

5 principles of an RM framework?

A

PACED!

  1. PROPORTIONATE to the level of risk
  2. ALIGNED with other b/s activities
  3. COMPREHENSIVE, systematic & structured
  4. EMBEDDED within b/s procedures and protocols
  5. DYNAMIC, iterative and responsive to change
8
Q

What 4Ps are the sources of hazard risks?

A

People

Premises

Processes

Products

9
Q

Give an example for each of the 4Ps

A

People: Lack of skill mix, resources

Premises: Damage, contamination, theft

Processes: IT or comms failure

Products: Poor service quality, suppliers

10
Q

Which of these best describes ‘residual’ (or net, current) risks:

A) A risk before any actions have been taken to manage it

B) A risk associated with speculative opportunities

C) A risk after risk management actions have been taken

A

C) A risk after risk management actions have been taken

11
Q

Which of these best describes ‘hazard’ risks?

A. Risks associated with the benefits of speculative opportunities

B. Risks associated with sources of harm

C. Risks associated with the management of uncertainty

A

B. Risks associated with sources of harm

12
Q

What are core processes?

A. Key components of a firm’s business model

B. The key things that the organisation needs to be successful

C. Operational requirements that impact a business’s significant risks

A

A. Key components of a firm’s business model

13
Q

Which of these best describes the term ‘mandatory’ in relation to risk management objectives as set out in MADE2?

A. To ensure that risk management complies with the five principles of PACED

B. To ensure that appropriate risk-management information is available

C. To ensure conformity with rules, regulations and obligations

A

C. To ensure conformity with rules, regulations and obligations