Risk Profile Analysis Understanding Enterprise Risk Assessment Tools

Global Enterprise Risk Analysis

How To Create A Risk Profile

Creating a risk profile for a company or enterprise is a key step in the risk management process.

Risk profile analysis includes an assessment of the business attitude to risk as well as the actual threats and opportunities facing the business. It will support the allocation of business assets for the best return on your investment of time and money.

The risk profile should provide a better understanding of the enterprise risks.

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Getting The Risk Balance Right For Your Corporate Enterprise

What is your corporate risk appetite? How much risk can your organisation tolerate? Should you take more or less risks?

Risk assessment risk identification establishes the exposure of the organisation to risk and uncertainty. The risk identification stage of the risk assessment process requires an intimate knowledge of the organisation the marketplace in which it operates the legal social political economic technological and cultural environment in which it exists as well as an understanding of strategic and operational objectives.

This will include knowledge of the internal and external factors critical to success and the threats and opportunities related to the achievement of objectives.

The ISO 31000 standard offers a methodical way to ensure that all value adding activities within the organisation have been evaluated and all the risks flowing from these activities identified and defined.

The result of the risk assessment can be used to produce a risk profile that gives a rating of significance to each risk and provides a tool for prioritising risk treatment efforts.

This ranks the relative importance of each identified risk. This process allows the risks to be mapped to the business area affected describes the primary control mechanisms in place and indicates where the level of investment in controls might be increased decreased or reapportioned.

The risk assessment process assists the effective and efficient operation of the organisation by identifying those risks that require attention by management. This will facilitate the ability to prioritise risk control actions in terms of their potential to benefit the organisation.

Attention to enterprise risks includes simply tolerating the risk as a necessary part of doing business to avoiding or terminating the risk exposure as it is too high for the risk culture of the business. In between you can treat or transfer the risk.

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Risk Profiling Methods

Use the latest risk profile analysis tools and techniques to help you improve your business enterprise performance.

When you know the risk profile of your business you can allocate your limited resources for best return. Balanced risk treatment is the activity of selecting and implementing the most appropriate risk control measures to modify the risk. Risk treatment includes as its major element

  • risk mitigation
  • risk avoidance
  • risk transfer and risk financing

Choosing the best risk treatment includes analysing the cost effectiveness of each risk treatment measure.

Once a risk treatment has been selected it must be monitored to ensure it remains as effective as first thought otherwise the risk treatment picked my result in higher risk exposure than your assessment concluded.

Risk treatment decision making must take into account corporate governance and compliance issues as non compliance for example may not be possible without severe penalises and consequences.

Risk transfer as a risk treatment measure must also be implemented with caution. Risk transfer may not transfer all of the risk under examination and where the risk is transferred to could fail and return the risk to your business.

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BusinessRiskTV Corporate Risk Profile Analysis

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