CIMA (2010) – Reporting and Managing Risk Flashcards
How does Tesco ensure that risk management is embedded in business activities?
‘Steering wheel’ scorecard links key objectives (outside of the wheel) to performance KPIs (spokes of the wheel) which ultimately achieve the org’s core goal: customer loyalty (centre of the wheel). Success of RM is measured using the KPIs with minimal bureaucracy
How is RM embedded in Tesco’s org structure?
Board set appetite. A flat hierarchy with named risk owners means processes for mitigating or exploiting risks are devolved quickly.
How might Tesco’s performance-focussed approach to RM be inappropriate to some parts of its business?
Tesco’s personal finance business may require greater governance. Focus on performance could drive inappropriate risk taking if not managed properly.
How did RBS approach to regulation contribute to RM failings?
Seen as box-ticking exercise
How did the culture within RBS contribute to failings in RBS?
Focus from the board on return on equity over risk aversion. RM activities were not well embedded.
How did the org structure contribute to RM failings in RBS?
Risks in silos such as insurance, regulatory, liquidity which prevented identification of aggregated risk. RM function sat beneath CEO with insufficient influence.
How did processes within RBS contribute to RM failings in RBS?
Dependency on financial modelling, across jurisdictions and with complex financial products instead of human judgement.
How do Birmingham City Council ensure risk registers are current and effective?
Investment in dedicated risk systems.
How are Birmingham City Council’s risks prioritised?
Traffic light system.
How do Birmingham City Council ensure corporate assurance and local accountability?
Risks addressed at group and directorate level, with RM tied to operational performance. Internal Audit function monitors effectiveness of activities.
How does the Department for Culture Media and Sport manage the risks associated with partnership working?
Leads identified, joint risk registers. Careful scoping, articulation and alignment of risks at the point of partnerships being formulated.
How does the Department for Culture Media and Sport address accountability?
Clear communication of risks from department to strategic level with ownership assigned where it risks are most likely to be addressed.
How does the Department for Culture Media and Sport ensure RM is well embedded?
Strong government-wide framework complemented by policies linked to risk domains
