RISK is the Effect of Uncertainty on Objectives [LNKD GROUP G31000 ]

7/25/2019 RISK is the Effect of Uncertainty on Objectives [LNKD GROUP G31000 ]

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Because RISK is the "efect o uncertainty on objectives" (accordingto ISO 31000! ho ris#s shou$d be described% &$ease give so'eea')$es o ris# descri)tions satisying that de*nition+

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Anne Crenshaw!Glen Hutchinson! Charles Thuo! 2 $i#e this

Martin Davies

4his is a very good 5uestion and there are so 'any )ieces o inor'ation I ou$d tag against a ris#descri)tion+ 6ere is the to) 10 but I can thin# o 'any 'ore )ieces o #no$edge I ou$d inc$ude inthe descri)tion o a ris#7

819 I ou$d give the ris# a na'e or reerence sa#e+

89 : $ist o i')acts that 'ight occur as a conse5uence o the "Ris# ;vent" or the actua$i9 : $ist o contro$ oners and a $ist o sta#eho$ders ho are )otentia$$y i')acted by the ris#outco'es+

8.9 : set o reerences to interna$ or eterna$ occurrences o the event ha))ening beore (hich isgoing to re5uire the ris# to be assigned to a category+ :re e dea$ing ith a ne )otentia$ ha


2/24

Francesco De Cicco"Because ris# is Cefect o uncertainty on objectivesC! the descri)tion o ris# needs to convey bothe$e'ents7 in other ords! 'a#e c$ear hich objectives are being reerred to and the source ouncertainty and ho it cou$d $ead to conse5uences+

4he )rocess o de*ning the ris# criteria invo$ves considering the )rinci)$e 'aniestationso each o the organi


3/24

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Martin Hopkinsonrancesco!

I consider any ris# descri)tion to be inco')$ete un$ess it inc$udes each o the o$$oing threee$e'ents7

,ontet (state'ent o re$evant act(s

Source(s o uncertainty (e+g+ event triggers! actors that inPuence uncertainty in efect

;fect(s

6ere is a si')$e ea')$e7

,ontet7 Gy son is a$$ergic to nuts ? 'y objective is to )revent the conse5uences o earting the'+ Source(s o uncertainty7 &otentia$ causes o inadvertent eating o nuts! inc$uding use o ne ood)roducts! visits to riends and interactions ith )eers at schoo$+ ;fect7 :na)hy$actic shoc# ? )robab$e need or urgent hos)ita$ treat'ent+

4here are a variety o ays in hich this chec#$ist can be de)$oyed into a ris# descri)tion+ orea')$e! in addtition to a ris# tit$e! 'any ris# register too$s inc$ude three *e$ds to ca)ture ris#descri)tions+ 6oever! you can a$so use it to dra 'ore co')$e structures such as inPuence

diagra's+

Qou )oint out right$y that the objective(s afected by the ris# shou$d be in the ris# descri)tion+ In)ractice! I ensure that this inor'ation is inc$uded in either the contet or efects state'ent+

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Julian du PlessisGartin! both o you! )resents very good )ointse$e'ents to consider+ I hoever donCt thin# it shou$da$$ be inc$uded in one $ong sentence to describe a ris#+ It a))ears it is a 'atter o ho the ris# is)resented to get buy?in acce)tance or its eistence+

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4/24

Bruce Zaccanti:$so i')ortant as #ey )oint o consideration is enter)rise to$erance or ris# ? inherent and residua$ ?the de*ned ris# 'ust then be understood in ter's o i')act to e')$oyees! assets and sta#eho$ders!then onershi) 'ust be asigned or 'onitoring and efective re)orting o deviations ro' the ris#to$erance based in $i#e$ihood and singi*cance to the enter)rise

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Martin Hopkinsonu$ian! I agree that a $ong sentence or )aragra)h tends to be an unattractive ay o describing a ris#and an ineFcient or'at or other )eo)$e to read+ It is )art$y or that reason that I brea# thedescri)tion into three e$e'ents I identi*ed in 'y ear$ier )ost+ I a$so tend to use bu$$et )oints!)articu$ar$y hen identiying sources o uncertainty+ 4o ta#e 'y ear$ier nut a$$ergy ris# ea')$e! I'ight describe the )ri'ary sources o uncertainty thus7

Inadvertant eating o nuts71+ contained in ood )roducts e have not )revious$y used+

1+ ound or ofered hen visiting riendsC houses+

1+ in ood sa))ed ith )eers at schoo$+

: useu$ eature o such a $ist is that it )rovides a )oint by )oint 'eans o chec#ing hether or notyou have i')$e'ented a$$ a))ro)riate action+ In other cases (a$though! )erha)s not in this ea')$eyou can a$so see i')ortant re$ationshi)s beteen the various sources o uncertainty+

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Martin DaviesI a' a$so su))ortive o u$ianCs co''ent! a $ong sentence or )aragra)h descri)tion or each ris#doesnCt )resent e$$ and the )ertinent detai$s beco'e $ost in the verbosity o the descri)tion+

:$so diferent sta#eho$ders o this inor'ation are going to need it or diferent )ur)oses7

4ea' 'anagers ant to see hat ris# a))etite )o$icy is connected to each ris# they on+

:uditors i$$ ant to ascertain hich contro$s are connected to hich ris#s and ho is res)onsib$eor those contro$s+
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5/24

;ecutive 'anagers and )$anners i$$ ant to understand the $i#e$ihood severity o each ris# andhether that has changed overti'e+

and so on +++

Niferent )eo)$e etracting a$ternate inor'ation out o the sa'e ris# registry+

I agree ith BruceCs state'ent as e$$A that each ris# i$$ be identi*ed! then assessed! eva$uated and

treat'ent inor'ation ca)tured+ ust as ISO 31000 out$ines in ,$ause - o the ISO 31000 )rocess+

iven ,$ause -! ris# registration through to ris# eva$uationA this is a continua$ and iterative )rocess!here ne inor'ation is being received in the ris# register )er)etua$$y+ ,oncise$y each ris#descri)tion! the entire ris# register docu'ent is a "$iving docu'ent" that is continua$$y changing orbeing a))ended to+

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Julian du PlessisI I 'ay suggest! since it is a 'atter o ho the ris# register is co')i$ed)resented! I ou$d )rovidethe ris# descri)tion and a$$ re$evant inor'ation in a tab$e ith o$$oing co$u'ns7

1+ ? Objective T this needs to be articu$ated *rst to 'a#e the $in# to the ISO31000 den

1+ ? Ris# T describe the uncertainty or event to understand the issue+ ISO suggests the cause 'ay be

inc$uded as )art o the descri)tion+ I )reer to high$ight it se)arate$y to sho the ,ause;fect andRis#,onse5uence re$ationshi)

1+ ? ,ause T to indicate and understand the source o uncertainty )er Gartin 6

1+ ? ,onse5uence T to indicate and understand hy the ris# 'ay be an issueconcern

1+ ? ;fect T to indicate it is eventua$*na$ i')act on the objective

e$$ the rest o the tab$e 'ay be dedicated to the o$d aithu$ &iG inor'ation! and or those ho)reers it the IR and RR co'bined ith the ,ontro$sRis# 4reat'ent identi*cation and rating+ 4he *na$tab$e design is your )rerogative and it shou$d IN the Ris# Oner o each ris# or sha$$ I say oner o

the objective+

Gartin 6 i you ou$d a$$o 'e to i$$ustrate using your ea')$e7

Objective U 4o stay hea$thy by eating ood ree o nuts or dee'ed sae or 'y a$$ergic condition

Ris# U ;ating ood that 'ay contain traces o nuts that has not been identi*ed

,ause U &re)arer o ood is unaare o 'y conditionMutritiona$ inor'ation on ood $abe$ is inaccurateVna'i$iar ith ood brand

,onse5uence U Gay go into an :na)hy$actic shoc# (there 'ay be others%

;fect U Severe )ersona$ injury or even Neath%(I a' not very #no$edgeab$e ith :na)hy$actic shoc# or nut a$$ergies

4he co')$ete the rest o the tab$e I guess is straight orard%
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6/24

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David Hulett, PhD FAAC!I $oo# at ris#s ro' the ris# source )ers)ective! but the de*nition $itera$$y 'eans the "efect ouncertainty on objectives+ I be$ieve that is describing the efect! not the source o the efect+ It 'aybe the diference beteen syste' ris# (hich cou$d be the resu$t o 'any individua$ ris#s actingtogether and "a ris#" hich is one o the root causes o that efect+

I have a$ays distinguished in the )roject 'anage'ent or$d beteen (1 ")roject ris#" that isovera$$ i')act o 'any ris#s and uncertainties on the *na$ objective! say *nishing on ti'e! and (the ris#s that cause )roject ris#+

I be$ieve that the ISO 31000 de*nition identiying the i'age o a ris# or )erha)s 'any ris#s )rojectedon the objective+ 4his has to be distinguished ro' the root causes o that i'age! the ris#s anduncertainties the'se$ves+ Interesting$y! this discussion thread ent direct$y to ( above! not to thede*nition in ISO 31000+


Martin HopkinsonW Navid! I thin# these are rea$$y good )oints! )articu$ar$y those on diferentiating beteen overa$$ris# and contributing ris#s+ Vnortunate$y I thin# you 'ight be giving ISO 31000 too 'uch credithen you say that its de*nition o ris# )ertains to overa$$ ris#+ I you read the notes to the de*nitiono ris# e+g+ MO4; - re$ated to the 'eaning o uncertainty and $in#ing it to the $i#e$ihood o events! itsee's so'ehat a'biva$ent+

W u$ian! your ris# descri)tion inc$udes a$$ three o the e$e'ents that I )revious$y described as beingessentia$ ? but I a' not sure hat has been added by s)$itting it into *ve )arts rather than three+ Ican see so'e case or a se)arate de*nition o the objective+ 6oever! I ou$d choose to co'binethe conse5uence and efect into one+


David Hulett, PhD FAAC!Gartin!Qes! a'biva$ent! ater a$$ those 'onths and years o consu$tation+ Gaybe the ter' "event" covershat I understand as a ris#! but i so! hy not use the ord everyone understands+
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7/24

I as )art o the VS 4: and 'ade these suggestions severa$ ti'es! but e got in the ISO 31000discussion $ate and nobody as interested in c$eaning u) the basic de*nition+ I suggest the e')erorneeds so'e c$othes+


Francesco De Ciccou$ian! in 'y tab$e I ou$d inc$ude7

T Vnit&roject&rocess:ctivityT ObjectiveT Ris# (efect o uncertainty on objective

T ,ause (ris# sourcethreatha


8/24

s)ecu$ative ris# and the )ure econo'ic one +I e try to ana$yise each one !e i$$ *nd that both afecting the objectives o any organi


9/24

In essence there are severa$ issues and $ayers associated ith individua$ ris#s and these shou$d beevidenced but not necessari$y ithin a ris# register+ 4he individua$ ris# descri)tion or articu$ation'ust be as s)eci*c as )ossib$e so that it can be ran#ed treated and chec#ed + Oten I have seen)eo)$e insert re)utation as an individua$ ris# hich in IGO is an i')act+ It is too diFcu$t to dea$ ithas there are too 'any )ara'eters+

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Martin DaviesI agree ith SeanCs state'ent that ris#s can sit in a tree $i#e structure! or ea')$e7

&oer outage 8;vent9 $eads to /oss o data 8;vent9 $eads to Gissed Orders 8;vent9and so on+

e cou$d o course have /oss o data 8;vent9 because o user 'a$)ractice 8;vent9! a se)arate tree oevents+

I a$so agree ith this state'ent "Oten I have seen )eo)$e insert re)utation as an individua$ ris#hich in IGO is an i')act+"

Re)utation ris# is an i')act in 'y o)inion and can oten be inserted as an additiona$ event in a treeo ris# events+ :$$ this aside! I *nd re)utation ris# can a$so sit on its on and occur ithout a )rior ris#event occurring+

anuary @! 013o /i#e(1o Re)$y )rivate$yo Re)ort s)a'

Francesco De Cicco

Gartin! to "sit ris#s in a tree $i#e structure"! I have a))$ied au$t (Success 4ree :na$ysis to certainris#s (on$y 5ua$itative$y at *rst to ta#e initia$ advantages o Boo$ean a$gebra+++

anuary @! 013o /i#e(1o Re)$y )rivate$yo Re)ort s)a'

Martin Daviesrancesco!

4his is the ay to go! Bayesian netor#s are good or this as e$$! rando' orests and &athNe)endent &artia$ /east S5uares (&/S! there are so 'any ays to s#in a cat +++ I a' or#ing on a


10/24

co')$ete &/S )rogra' at the 'o'ent that i$$ do this ty)e o 'ode$$ing in$ine ith a'u$tidi'ensiona$ Bo4ie diagra'+ I have the R?&roject code #ind o or#ing! just need to rite u)the ea')$e+

I ou$d be rea$$y interested in seeing your Boo$ean a$gebra 'ethod! es)ecia$$y i you have itdocu'ented! do you have it running in sotare%

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Francesco De CiccoGartin! the genera$ 'ethod or 4: I have used ever since I as a young boy 7? co'es ro' Syste'Saety ;ngeneering and it is su''ari


11/24

Martin Daviesrancesco!

4his M:S: )a)er is antastic! I $i#e it very 'uch because it e)$ains the theory and gives )ractica$ea')$es+

&OIM4 1 ? Nata housingI e etend this de*nition )rocess e have been discussion above! across an entire co')any! eare going to end u) ith a $ot o data+ In efect! the ris# descri)tion 'ethods that e have a$$ beendiscussing in this oru' beco'e high in vo$u'e and a s)readsheet is un$i#e$y to be suitab$e orca)turing such inte$A there is just too 'uch data+

4he ris# 'anager is going to need a ris# database or syste'+ Mo I #no a $ot o ana$ysts orryabout *nding an a))ro)riate sotare vendor and 'ost o the' are se$$ing )otions but I a' avid an

o bui$ding our on ris# so$ution ro' the ground u) and I rote a b$og on this herehtt)7goo+g$K$.Qn

I you #no hat you ant! it on$y ta#es a 'atter o ee#s to bui$d an entire ris# so$ution+

&OIM4 ? au$t 4ree :na$ysishen creating a au$t tree netor# e have to be careu$ that e donCt bui$d in syste'ic de)endencyboth on entry )oints to ha


12/24

Martin Davies,har$es! the objective has to re'ain! this is a very good )oint that you 'a#e+

So ith each ;vent?I')act! the outco'e on any under$ying objective(s needs to be $isted and'a))ed+

819 So ris#s connect to causa$ drivers and causa$ drivers connect to contro$s89 Ris#s a$so connect to i')act or outco'es839 Outco'es are connected to objectives i')acted8=9 Outco'es are a$so connected to contro$s

I #no it sounds co')$e but have a $oo# at the )resentation I have shared htt)7goo+g$K$.Qn+ Ons$ide 3! I describe ho various ris# 'anage'ent co')onents are $in#ed and on s$ide -! I sho anea')$e database that suits as)ects o hat you are saying above and hat I have $isted in )oints

1!!3!=

or hat its orth! it i$$ on$y ta#e a day or so to bui$d such a database! i you are or#ing ith I4database )eo)$e that are on to) o it and a ris# 'anager ho has a c$ear vision on hat they ant toachieve ith this+ 4hese to hu'an e$e'ents are oten not the case but it can be done hen theyare+

;ar$y $ast year I or#ed ith an :rican co')any to bui$d such a database! the ris# tea' and 'yse$sat in a roo' in Nubai ro' about 10730 to 1>700! 'inus a $unch brea# and our database as bui$tand o)erationa$ by the end o the day+

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Peter B$%&$A'D4he genera$ 'ista#e I see oten ha))ening is the conviction that ris# or objectives can be iso$atedand treated in an iso$ated ay+

:s soon as you have an objective thereCs ris#+ :s soon as you have ris# thereCs so'e objectiveinvo$ved+ But itCs never iso$ated+ ItCs a$ays the resu$t o a eb o s'a$$er and bigger e$e'ents o aho$e+

Qou can co')are ris# ith the universe+ ithin the universe you cou$d se$ect a ga$ay and in thisga$ay you can deter'ine a so$ar syste' and ithin this so$ar syste' you can see )$anets and on a)$anet you can *nd countries and ithin those countries you can *nd cities and ithin those citiesyou can *nd co')anies and ith a co')any you can *nd strategic objectives and ithin thosestrategic objectives you can *nd targets and ithin those targets you can *nd tas#s and ith thesetas#s! you can *nd )eo)$e and they have a$$ their individua$ targets! goa$s objectives! )ur)ose! +++ andthereCs no 100J certainty about any o the'+ ;verything is connected and can inPuence othere$e'ents in the syste'+

So e have to )ut boundaries on the syste' e are dea$ing ith+ 4he 'ore con*ned you )ut theboundaries! the easier to deter'ine the objectives! hoever! the $oer your 5ua$ity o )erce)tion i$$be and the higher uncertainty+
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13/24

:s $ong as thereCs even on$y one objective $et! thereCs ris#! because such a c$osed and con*nedboundary on a syste' incurs high uncertainty by $ac# o inor'ation o the bigger ho$e++

:s soon as you o)en u) the boundaries! 'ore objectives start to interact! inPuencing again overa$$uncertainty+

etc+++

so I co')$ete$y agree ith rancesco7

"Because ris# is Cefect o uncertainty on objectivesC! the descri)tion o ris# needs to convey bothe$e'ents7 in other ords! 'a#e c$ear hich objectives are being reerred to and the source ouncertainty and ho it cou$d $ead to conse5uences"

anuary ! 013o /i#e(o Re)$y )rivate$yo Re)ort s)a'

Alan Fotherin(ha"I thin# e need to 'a#e sure e donCt $ose ocus here+

e need to ba$ance the need or brevity ith the need to ca)ture three essentia$ )ieces oinor'ation ? the eventcircu'stance ( industria$ accident A the source ( $ac# o care etcAand thenature o the i')act in re$ation to va$ue drivers ( hu'an! *nancia$!re)utationa$! $ega$ and etc+ 4his isvery si'i$ar to the a))roaches Gartin and u$ian have suggested++ :s u$ian ( and rancesco and &eter have noted! the objective shou$d be recorded as e$$ ? though (de)ending on the organisation I

donCt a$ays insist on it because the anser is oten ":$$"+

Gany organisations get ed u) trotting out a u$$ "three )art" descri)tion ? and insist on using a shortna'e $i#e "6ea$th and SaetyC but i thin# it very i')ortant to #ee) re'inding the' o the threee$e'ents to ensure that they ocus their attention a))ro)riate$y+

In noting conse5uence and $i#e$ihood rating co$u'ns ransesco has 'oved on into the ana$ysis andeva$uation stages o the )rocess ? hich ? together ith an assess'ent o the efectiveness ocurrent contro$s ? ou$d dra on 'any o the detai$s Gartin has 'entioned+

It see's to 'e that this is thorough$y constructive thread hich I ho)e others i$$ read

anuary 10! 013o /i#e(o Re)$y )rivate$yo Re)ort s)a'

Julian du Plessis

:$an! 'y )ersona$ e)erience ith bringing in the objectives have been it e)oses $ine 'anage'entith regard to ho e$$ they understand the business and the overa$$ o)erating 'ode$+ Qes! it does$eave so'e bruises on the ris# oFcer and the identi*cation and acce)tance o the re$evant ris#a$'ost i')ossib$e+

anuary 10! 013
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14/24


Peter B$%&$A'D: 'ode$ that can he$) you in setting boundaries to your "syste'" and describingris#s7htt)7+s$ideshare+netBQ:[

I i$$ not describe the ho$e 'ode$! but ro' to) to botto' you go ro' the strategic to theeecutioner $eve$+

:t each $eve$ there are objectives+

:t a$$ $eve$s thereCs a certain $eve$ o )erce)tion (i+eA inPuence o attitude and ho rea$ity is )erceivedcr ,hris :rgyris and his $adder o inerence or 'ore on this 7 a short

video 7htt)7+youtube+co'atch%v\Knhs-@o@+

Starting ro' the strategic objectives! going don to a$$ under$ying o)erationa$ objectives andobjectives at the eecutioner $eve$! i$$ bring you the c$arity to search or strengths ] o))ortunities(2ris# and ea#nesses and threats (? ris# c$osing the $oo) into the actua$ resu$ts in your contethich i$$ urther eed your rea$ity and attitude+

Vnderstanding the $oo)s in the 'ode$! seeing the interde)endence o goa$s and objectives at a$$ othese $eve$s i$$ guide you to your )riority ris# and itCs de*nition+

anuary 10! 013o /i#e(1o Re)$y )rivate$yo

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)ahul Ma(an,MBA FinanceW rancesco ? I u$$y disagree ith the thoughts o " RISK is the "efect o uncertainty on objectives"as i this is the case then this is sheer $ac# o Ris# 'anage'ent )o$icies on Organi


15/24

/in#ed to an objective hoever it beco'es ris#+ In other ords! e)osure on$y 'eans so'ething i anobjective is invo$ved+Starting ro' objectives )uts everything in )ers)ective+

anuary 10! 013o /i#e(0o Re)$y )rivate$yo Re)ort s)a'

Martin Hopkinson&eter!

/i#e so'e others contributing to this discussion! I get a bit rustrated ith the *ation that 'ost ris#'anage'ent standards have ith objectives+ &erha)s this is because! to 'e! the ord objective isassociated ith hard and ast 'easures++++ and I be$ieve that you can identiy and 'anage ris#s )rior

to having estab$ished such 'easures+ or ea')$e! you can use a ris# 'anage'ent )rocess to he$)set such 'easures at sensib$e ris#?adjusted $eve$s e+g+ hen setting a )roject budget+

&ersona$$y! I ou$d )reer to see a de*nition o ris# a$ong the $ines o "uncertainty that 'atters"!rather than uncertainty that has an efect on objectives+


Peter B$%&$A'DGartin!

Gy vie on this7

4a#e on a broader )ers)ective on the ord objective+ ItCs anything that 'attersY

Staying beco'ing hea$thy! 'a#ing a )ro*t! beco'ing successu$! reaching the to) o the 'ountain!

reaching the other side o the street! ++++

I you see ris#! you see things that 'atter+ 4hese things are re$ated to objectives+ Societa$!organisationa$! individua$+ :s# yourse$ "hat )ur)ose! as)irations! goa$s! targets! objectives! +++ cou$dbe invo$ved%"

It )rovides a c$ear starting )oint to deter'ine and ana$yse ris#+

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16/24

Martin Hopkinson&eter! i your inter)retation o the ord objectives is "anything that 'atters"! then e ou$d be inagree'ent+


Peter B$%&$A'DI guess this is the ISO31000 )oint o vie! otherise it ou$dnCt 'a#e sense+ 6o I read it! itCs on$ye)anding the vie! not changing it+

4han#sY


Francesco De CiccoT G:R4IM Navies! I have accessed your b$og and ound the so$ution you are deve$o)ing 5uite

interesting+ Qes I i$$ a))reciate to #no the ne )resentationY

T R:6V/ Gagan! I thin# B$o#$and e)$ained the 'eaning o Ris# according to ISO 31000 very e$$++++

:nd ho I ou$d de*ne Objective% /etCs see+++

In the area o Xua$ity Ganage'ent! ISO 000700- de*nes Xua$ity Objective as o$$os7

"Xua$ity objective7 so'ething sought! or ai'ed or! re$ated to 5ua$ity+

Mote 1 Xua$ity objectives are genera$$y based on the organi


17/24

)ahul Ma(an,MBA Finance

W &eter ? In 'ost o the ti'es there is no objective attached to ris# 'anage'ent or ris#'anage'ent )o$icies+

/i#e hen a 4rader ta#es any O)tion ,ontracts vs+ &$ain vani$$a orard contracts then there is noobjective behind this trade because you are $iving under o)en b$ue s#y and not sure here you $andu)+

anuary 1.! 013

o /i#e(0o Re)ort s)a'

Alan Fotherin(ha"WRahu$ ? 4his site is dedicated to the discussion o enter)rise ris# 'anage'ent ? as under ISO 31000+ In this contet the re$evant objectives are the objectives o the organisation+ Organisations a$ayshave objectives ? though these 'ay not a$ays be c$ear$y stated+ One o the bene*ts o 31000 is thatit orces directors and senior eecutives to ocus on organisationa$ objectives? and to deve$o)strategies and action )$ans according$y

:s &eter says the efect o uncertainty on (achieve'ent o these objectives+++++++IS Ris#+Y

8 &S I $i#e your )hoto+ I )resu'e you are the one standing u)Y9

anuary 1.! 013o /i#e(0o Re)$y )rivate$yo Re)ort s)a'

Peter B$%&$A'DWRahu$!

hy 'a#e a trade i thereCs no objective to do so+ See's odd to 'e+ I su))ose the obvious objectiveo traders is to 'a#e a )ro*t or so'ething a$i#e+

ItCs not because you havenCt conscious$y deter'ined or na'ed objectives! that there arenCt anyY

I you 'anage ris#! itCs to 'ai'i


18/24

)ahul Ma(an,MBA FinanceW :$an ? e are having 'i$$ions o ea')$es beore us ho are having ISO 31000 based Ris#Ganage'ent )o$icies hoever the rea$ intention is so'ething e$se and 'oreover e a$$ have toagree that these ISO standards are either o$d in nature or turning obso$ete hence orth onCt be ab$eto he$) Organi


19/24

Peter van 'ederpelt:nother a))roach 'ay be )ossib$e+ /et 'e use u$ianCs ea')$e+ In his ea')$e the net CareaCsC canbe distiguished+

1+ 6ea$th o u$ian

1+ Saety o the ood that u$ian eats

1+ :ccuracy o the nutritiona$ inor'ation on the ood $abe$

1+ :areness o the ood )re)arerer o u$ianCs condition

1+ a'i$iarity o u$ian or the )re)arer ith ood brand

:n area is ? as you can see ? a co'bination o a characteristic (saety and a noun (ood+

4hese areaCs are de)endent on each other+ &rob$e's ith area 3! = and - 'ay cause )rob$e's itharea + &rob$e's ith area 'ay cause )rob$e's ith area 1+

Or the other ay around7 :rea 1 is de)endent on area + :rea is de)endent on area 3! = and -+ 4hisis the to) don a))roach+

Ris#s are identi*ed by identiying the right areas that are re$ated to the objective hich is in thiscase a hea$thy u$ian+

or each area various ste)s can be ta#en such as hat are the re5uire'ent or the area and hich

'easures shou$d be ta#en to contro$ the area+

4his a))roach is )art o the Object?oriented Xua$ity and Ris# Ganage'ent (OXRG 'ode$+ Search orOXRG at oog$e i you ant to $earn 'ore about this 'ode$+

une ! 013o /i#e(o Re)$y )rivate$yo Re)ort s)a'

Martin Hopkinson&eter! one thing I notice ro' your ea')$e is that nu'bers ?- in your bu$$et )oint $ist are hat Iou$d ter' "sources o uncertainty"+ I ou$d contend that that a ris# descri)tion is inco')$ete i itdoes not identiy the re$evant source(s o uncertainty+ (See the third )ost in this discussion+ So! Ithin# your ea')$e is useu$! and I i$$ go and do the OXRG oog$e search+

/i#e youse$! I re5uent$y use a bu$$et )oint $ist $i#e this ithin ris# descri)tions+ It is a habit thatorces you to thin# through the diferent sources o ris# rather than just being satis*ed ith the *rstone that ca'e to 'ind+

une ! 013o /i#e(0o Re)$y )rivate$yo Re)ort s)a'
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20/24

Peter van 'ederpeltGartin!

Qes! nu'ber ?- are sources o uncertainty or a ris# source as ISO 31000 ca$$ this ter'+ :nd! there isa hierarchy beteen these sources+

Key to the OXRG a))roach is the conce)t o ocus areaCs hich is+a co'bination o a characteristic(saety and a noun (ood+ ;ach ocus area can be 'anaged by ta#ing the right actions+

I agree! that you shou$d identiy diferent sources o ris# in order to be co')$ete+

une ! 013o /i#e(0o Re)$y )rivate$yo

Re)ort s)a'

#a"uel De"uthI understand (and sy')athise ith the atte')t ? but this s)eci*c ea')$es ai' is ar too coarse+Qour $ayers are ai$ing you at )oint +

ithout de$ving too dee)$y it is i')$icit$y understood that the hea$th o u$ian is on$y )art$yunderritten by ood (consu')tion+It is i')$ied (but its hard to be certain that the $eve$s under are intended to be u$$so'e ? in thisthey ai$ ? )art$y because the de*nition at is inade5uate (I consider ? un$ess this is on$y intended inturn to be an atte')t at a )artia$ coverage ? in hich case hy choose these $i'its (% and ('orei')ortant$y not state the'+++

SoA suggest 71+ Ba$ance o consu')tion or the )ur)ose o net nutritive va$ue brought into contact ith u$ian+

:$$ these e$e'ents are re5uired and i')ortant+

4he "ba$ance" recognises that any one thing that is re5uired or u$ian to re'ain hea$thy i eaten to

ec$usivity i$$ be unhea$thy to the )oint o being dead$y+

"consu')tion or the )ur)ose o net nutritive va$ue" recognises that not a$$ things that are eaten arebene*cia$ (at a$$! or in the 5uantities consu'ed s)eci*ca$$y or the )ur)oses o nutrition ? ora$'edicinesA or are )ure$y incidenta$ (nasa$ 'ucus and anything it contains+

"brought into contact +++" recognises that things that are eaten in the be$ie that they i$$ bebene*cia$ nutritive$y 'ay not be so to the etent be$ieved at the outset (the ood 'ay be of ? or it'ay "disagree" ith the individua$ regard$ess o $abe$$ing+

,autionary Motesood brought into contact ith u$ian non ora$$y 'ay cause har' (onions being cut ? chi$$i in various

$ocations+ Harious oods incorrect$y coo#ed+ Beer in suFcient 5uantities to dron in (b$ac# san ? isthat a brand na'e %+Mot a$$ consu')tion need be ora$$y ad'inistered+

4his suggests various avenues or urther (additiona$ ea'ination+4he $esson I su))ose is 7 understand the syste' and the contet+
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21/24

une 10! 013o /i#e(1o Re)$y )rivate$yo Re)ort s)a'

Julian du Plessise$$ Sa'ue$ I a' sti$$ a$ive+

une 10! 013


Peter B$%&$A'DVndoubted$y this is the )ositive efect o uncertainty on (your objectivesY

Oten e ta#e too 'any things or granted! here it re5uires a dedicated attention and co''it'entto succeed in the $ong ter'+


Peter van 'ederpeltSa'ua$!

I agree the ea')$e cou$d be 'ore s)eci*c and co')$ete+I just tried to i$$ustrate the conce)t o Cocus areasC hich is ne in the do'ain o ris# 'anage'ent+


#a"uel De"uthW&eter4he 'ethod you )ro)ose has MO46IM rong ith that I can see+hat I anted to )oint out is that a good 'ethod ina))ro)riate$y a))$ied can $ead you into be$ieving
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22/24

that the syste' under scrutiny is understood and "covered"! hen that is not 5uite the case+

hi$e $oo#ing at Ris# in de)th e are careu$ to ensure that e 6:H; Ris# over$a)s ? but a$so that e#no hat the over$a)s are+ Over$a)s are a better )$ace to be than "under$a)s" ? but in a$$ caseshatever the "/a)" status ? its the #no$edge o the "co')etence" (or ant o a better ord henta$#ing about a deci*t o your on #no$edge and co')rehension o the syste's hich is vita$+

I you #no that you donCt have it covered ? thats great YI the other a$ternative is not to #no that you donCt #no it+

I see! understand and :&&/:VN hat you are atte')ting+4he care that is needed is in the $ayering ? you are trying to ju') to the end stages too 5uic#$y ?)robab$y or the )ur)oses o de'onstration ? but that can $ead us astray+

4he criticis' is not o the techni5ue+4his is intended 'ore as a arning ? the techni5ue or#s and it has c$ear a))$icabi$ity+Be careu$ and thoughtu$ in ho it is a))$ied and it can continue to serve us e$$+


#a"uel De"uthWu$ianIC' so re$ieved+ Qou be careu$ out there ith those dangerous 5uantities o ood+


Peter van 'ederpeltSa'ua$!

I tota$$y agree! Qou shou$d cover a$$ areas+ 4hereore! you 'ust #no and co')rehend the syste'+Qou shou$d be aare o the ris# o Cunder$a)C and b$ac# sans+

une 11! 013o /i#e(o Re)$y )rivate$yo Re)ort s)a'

#a"uel De"uthIn 'y )osting res)onding to &eter on the $ayers hat as intended to be a nu'ber (to has been'ysterious$y rebadged as a 1 (one+ I didnCt do it ? a)o$ogies or any conusion as a resu$t+


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ina$$y (i it he$)s I *nd that I )reer to thin# o 6a


24/24

> 'onths agoo /i#e(0o Re)ort s)a'

Documents

RISK is the Effect of Uncertainty on Objectives [LNKD GROUP G31000 ]