Risk Management Presentation by Sharlotte Margallo

These flashcards cover key concepts and definitions from the Risk Management lecture presented by Sharlotte Margallo.

What is risk management according to the ISO 31000 definition?

Risk Management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor and control the probability and/or impact of unfortunate events and to maximize the realization of opportunities.

List three basic principles of risk management.

Create value, be an integral part of the organization, and be systematic and structured.

What are the first two steps in the risk management process as outlined by ISO 31000?

Establish the context and identification of potential risks.

What types of risks are associated with investments?

Business Risk, Financial Risk, Liquidity Risk, Default Risk, Interest Rate Risk, Management Risk, Purchasing Power Risk.

What are the four categories of potential risk treatment techniques according to ISO 31000?

Risk Avoidance, Risk Reduction, Risk Sharing, Risk Retention.

Who should oversee the enterprise risk management (ERM) framework in an organization?

The Board should oversee that a sound enterprise risk management framework is in place.

What is the purpose of having a Board Risk Oversight Committee (BROC)?

To ensure the functionality and effectiveness of a company's Enterprise Risk Management system.

What is one responsibility of the risk management committee within an organization?

To assess management's efforts to monitor overall company risk management performance and to continuously improve the firm's capabilities.

What principle addresses the strengthening of internal control systems in risk management?

Principle 12 emphasizes having a strong and effective internal control system and enterprise risk management framework.

What should the risk management process begin with?

Set up a separate risk management committee chaired by a board member.