MODULE 1

Introduction To Risk Management

This module covers the theory, concepts and process of Risk Management.

Module 1: Introduction To Risk Management is split into the following parts:

PART 1: The Theory and Practice of Risk Management

Section 1: The Theory Of Risk Management

Outlines the risk management policy and framework, which form the foundations of the risk management process.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Define a risk management framework
  • Describe the contents of a risk management framework
  • Recall some of the required steps in the successful implementation of risk management
  • Recall the five major steps of the risk management process

Section 2: Risk Management In Practice

Provides an introduction and overview to the theory of risk management and begins to identify how the theory is applied in a practical context. This section also describes the evolution of risk and risk management, as well as the current state of risk management as a discipline.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Define risk and risk management
  • describe the principle of risk and risk management
  • Describe related risk management standards

PART II: The Risk Management Process

The second part of this module provides you with an in-depth breakdown of the five phases of the risk management process, including:

Learning outcomes:
Upon completing this section, the student should be able to:

  • Communicate and consult
  • Establish the context
  • Risk assessment
  • Treat risks
  • Monitor and review

Section 3: Communication and Consultation

Provides an introduction and overview to the theory of risk management and begins to identify how the theory is applied in a practical context. This section also describes the evolution of risk and risk management, as well as the current state of risk management as a discipline.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Describe the benefits of effective risk management communication
  • Recall examples of internal and external stakeholders
  • Distinguish between internal and external stakeholder risk management tasks.

Section 4: Establishing the context

This section provides you with an overview of establishing the context, the second step in the risk management process. This step involves defining the strategic, organizational and risk management contexts of an organization.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Describe what it means for an organization to establish a risk management context
  • Define the key elements of the risk management context
  • Describe the benefits of establishing the risk management context
  • Define and provide examples of external and internal context factors

Section 5: Identify Risks

This section describes risk assessment, the next phase in the risk management process and focuses on the first step – identify risks.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Define risk assessment
  • Describe the purpose and benefits of risk assessment
  • Recall the three steps of risk assessment
  • Define risk identification
  • Define a risk exposure
  • Describe the four characteristics of risk exposures
  • Describe the risk identification techniques you can use to obtain the following information:
    - historical data
    - theoretical analysis
    - informed and expert opinions/stakeholder needs
  • Describe the risk register

Section 6: Analyze risks

This section describes risk analysis, which is the next step in the risk management process.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Define risk assessment
  • Describe the purpose and benefits of risk assessment
  • Recall the three steps of risk assessment
  • Define risk identification
  • Define a risk exposure
  • Describe the four characteristics of risk exposures
  • Describe the risk identification techniques you can use to obtain the following information:
    - historical data
    - theoretical analysis
    - informed and expert opinions/stakeholder needs
  • Describe the risk register

Section 7: Risk Evaluation

This section describes risk evaluation – the final step in the risk assessment sub-process.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Define risk evaluation
  • Describe the purpose of risk evaluation
  • Describe the benefits of risk hierarchies
  • Describe the relationship between risk exposure evaluation and an organisation's risk appetite
  • Describe the importance of having comprehensive information in calculating the likelihood and consequence of a risk exposure
  • Recall some of the practical considerations affecting the ranking of relative sizes of risks.

Section 8: Risk Treatment

This section describes risk evaluation – the final step in the risk assessment sub-process.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Define risk treatment
  • Recall approaches an organization can take if a risk is at an unacceptable level
  • Describe the cost trade-offs of treating risk exposures
  • Describe the following two types of risk sharing:
    - Risk control
    - Risk financing
  • Recall examples of risk treatment activities
  • Describe the two phases of establishing and implementing a risk management treatment process
  • Describe the objectives of risk treatments/controls
  • Evaluate the effectiveness of existing risk treatments/controls

Section 9: Monitoring and Review

This section provides an overview of the monitoring and review process.

Learning outcomes:
Upon completing this section, the student should be able to:

  • Define risk treatment
  • Recall approaches an organization can take if a risk is at an unacceptable level
  • Describe the cost trade-offs of treating risk exposures
  • Describe the following two types of risk sharing:
    - Risk control
    - Risk financing
  • Recall examples of risk treatment activities
  • Describe the two phases of establishing and implementing a risk management treatment process
  • Describe the objectives of risk treatments/controls
  • Evaluate the effectiveness of existing risk treatments/controls