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Workplace > Risk > Flashcards

Risk Flashcards

1
Q

Risk

A
  • The effect of uncertainty on objectives
  • It is potential - what could happen (not positive or negitive)
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2
Q

Antifragility

A

Ability to not just withstand high-impact events or shocks but to improve and benefit from them.

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3
Q

Risk management

A
  • Coordinated activities to direct and control an organization with regard to risk
  • Designed to change the probability of risk event occurring and/or degree of impact on organization’s objectives
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4
Q

Known knowns

A

Events to be expected and involve little uncertainty

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5
Q

Known Unknowns

A

Uncertainties we know exist, but don’t know much about their probability or impact

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6
Q

Unknown knowns

A
  • Risks we mistakenly think we understand
  • Black swans - unforseen outlier events that are rare and have a major impact
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7
Q

Types of risk

A
  • Strategy
  • Operations
  • Financial reporting
  • Compliance
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8
Q

Internal and preventable risks

A
  • Come from inside the organization
  • Could include violations of ethics and failures in routine processes
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9
Q

Strategy risk

A

Risks that affect the organization’s ability to achieve its objectives

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10
Q

Operations Risk

A

Risks that affect the ways the organization creates value

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11
Q

Financial reporting risk

A

Risks that affect the accuracy and timeliness of information about the organization’s financial performance and condition

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12
Q

Compliance risk

A

Risks associated with meeting the requirements of laws and regulations

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13
Q

Benefits of risk management

A
  • Aligns risk management process process with the organization’s strategy and objectives
  • More effective and consistent response to risk
  • Losses are reduced and less resources wasted
  • Risks are understood and managed
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14
Q

Barriers to risk managemeng

A
  • Structural
  • Cognitive
  • Cultural
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15
Q

Structural barrier to risk management

A
  • Silo organizations
  • Respond to risk in operational rather than strategic
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16
Q

Cognitive barrier to risk management

A

Need to think past “if then” scenarios to “what if” scenarios

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17
Q

Cultural barrier to risk management

A
  • Be aware of the diverse workforce and their beliefs and attitudes toward risk
  • Communicate the organization;s position and appetite for risk
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18
Q

An effective risk management program should

A
  • Create and protect value
  • Be integral part of all orgnizational process
  • Be apart of decision making
  • Address uncertainty
  • Be systematic, structured and timely
  • Based uponthe best available information
  • Fit an organization’s risk and control environment
  • Take into account human and cultural factors
  • Transparent and inclusive
  • Dynamic, iterative and respond to change
  • Facilitate continual improvement of the organization
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19
Q

Risk Organizational Framework Steps

A
  1. Management commitment
  2. Design a framework for managing risk
  3. Implementing risk management
  4. Periodic monitoring and review of the framework
  5. Continual improvement of the framework
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20
Q

Risk Management Process

A

1. Establish the context of risk

1. Define risk appetite and set risk management goals 2. Identify and analyze risks 3. Manage risks 4. Evaluate

The circle then goes back to 1

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21
Q

Risk position

A

The organization’s desired gain or acceptable loss in value

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22
Q

Risk appetite

A
  • Also called risk tolerance
  • Amount of uncertainty an organization is willing to pursue or to accept to attain its risk management goals
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23
Q

Risk appetite/risk tolerance affect

A
  • Amount that risk that will help organization reach or interfere with the strategic goals
  • Characteristic attitude toward risk
  • Resources or risk capacity
  • Externally imposed requirements (fire prevention programs)
  • Loss expectancy
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24
Q

Single loss expectancy (SLE)

A
  • Expected monetary loss every time a risk occurs
  • Single loss expectancy = asset value * exposure factor
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25
Q

Annualized loss expectancy (ALE)

A
  • Expected monetary loss for an asset due to a risk over a one-year period
  • Annualized loss expectancy = single loss expectancy * annualized rate of occurrence
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26
Q

Misaligned risks

A
  • Moral hazard
  • Principal-agent problem
  • Conflict of interest
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27
Q

Moral hazard

A
  • One party engages in risky behavior knowing that it is protected against the risk because another party will incur any resulting loss.
  • Ex: insurance
28
Q

Principal-agent problem

A
  • Situation in which an agent (employee) makes decisions for a principal (employer) potentially on the basis of personal incentives that may not be aligned with the principal’s incentives.
  • Ex: providing incentives
29
Q

Risk control

A
  • An action taken to manage a risk
  • First step when evaluating a risk is to see if risk controls are in place and then if they are effective
  • Ex: safety training, require signitures
30
Q

MECE

A
  • Mutually exclusive and comprehensively exaustive
  • Identify all possible risks and all strategic and operational aspects of the business and avoid duplication or overlapping identification
31
Q

Duty of care

A
  • Principle that organizations should take all steps that are reasonably possible to ensure the health, safety, and well-being of employees and protect them from foreseeable injury
  • Occurs throught the entire employment lifespan
32
Q

Duty of care how to understand the risks

A
  • Consult with experts and information sources
  • Focus groups and individual interviews
  • Surveys
  • Analyzing processes
  • Direct observation
33
Q

Hazard

A
  • Potential for harm
  • Often associated with a condition or activity that, if left uncontrolled, can result in injury or illness.
34
Q

Risk level formula

A

Risk level = probability of occurrence * magnitude of impact

35
Q

Risk scorecard

A
  • Tool used to gather individual assessments of various characteristics of risk and weighs risk more heavily against strategic importance
  • Ex of characteristics of risk (frequency, degree of impact, loss or gain of the organization)
36
Q

Risk Matrix

A
  • Simple grid where horizontal axis is probability and vertical is severity of impact
  • Doesn’t reflect the degree the organization is prepared against the threat
37
Q

PAPA model includes

A
  • Prepare
  • Act
  • Park
  • Adapt
38
Q

PAPA Prepare

A
  • Low likelihood and fast speed of change
  • Contingency plans must be in place and early indicators defined
39
Q

PAPA Act

A
  • High likelyhood and fast speed of change
  • Threats and opportunities require immediate response to threat occuring or significant damage
40
Q

PAPA park

A
  • Low likelihood and slow speed of change
  • Good time to monitor changes, but not be involved in mitigation or contingencies
41
Q

PAPA Adapt

A
  • High likelihood and slow speed of change
  • May affect the organization signifiantly
  • Ex: hiring disabled new hires and should update the office accordingly but not necessary immedately
42
Q

Key risk indicators (KRIs)

A
  • Metrics that provide an early signal of increasing risk exposures for an enterprise.
  • Changes the way risks are prioritized or management actions
  • Need to be strategically aligned
43
Q

Risk register

A
  • Lists the information and responsibilitys for managing specific risks
  • Increases transparency and accountability for risk management process
  • Can be developed incrementally as part of risk management process
44
Q

Risk management tactics include

A
  • Lists the information and responsibilitys for managing specific risks
  • Increases transparency and accountability for risk management process
  • Can be developed incrementally as part of risk management process
45
Q

Upside risk management tactics

A
  • Optimize
  • Share
  • Enhance
  • Ignore
46
Q

Downside risk management tactics

A
  • Avoid
  • Transfer
  • Mitigate
  • Accept
47
Q

Avoidance Risk Treatment

A

Decision not to become involved in or action to withdraw from risk situation

48
Q

Retention Risk Treatment

A

Acceptance of buden of loss or benefit of gain for a risk

49
Q

Residual risk

A

Amount of uncertainty that remains after all risk management efforts have been exhausted.

50
Q

Risk management objectives should

A
  • Be strategically focused
  • Combine activities and results
  • Combine lagging and leading metrics
  • Modifying risks related to noncompliance
  • Instilling risk management principles in organization’s members and processes
51
Q

Lagging metrics

A

Look backward at what has been accomplished

52
Q

Leading metrics

A

Measure performance that will affect results in the future

53
Q

Emergency preparedness and business continuity require:

A
  • Contingency plan
  • Response capability to secure employee health and safety and continue productivity
54
Q

Contingency plan and its goals

A
  • Protocol that an organization implements when an identified risk event occurs.
  • Include time frames
  • Supported with training and opportunities for practice
  • Developed with specific goals in mind
    • Immediate security for employees, company assets and stakeholders
    • Comply with local laws and regulations
    • Document and report as required
55
Q

HR involvement in contingency plans

A
  • Policies
    • Define and communicate policies to avoid or mitigate risk
  • Evacuation and relocation
    • Maintain rosters
  • Communication
  • Training
  • Continuity
56
Q

Crisis Management and Readiness Process (No Crisis)

A
  1. Identify and manage risks
  2. Develop crisis management plan
  3. Train, test, drill
  4. Learn
  5. Evaluate and revise plans as needed

Then goes back to step 1

57
Q

Crisis Management and Readiness Process (Crisis)

A
  1. Identify and manage risks
  2. Develop crisis management plan
  3. Crisis
  4. Activate plans
  5. Recover, learn, improve
  6. Evaluate and revise plans as needed

Then goes back to step 1

58
Q

Workplace voilence protection

A
  • Policy outlining organizational stance towards workplace voilence and outlining response procedures to prevent response from escelating
  • Create a response team
  • Conduct drils (including active shooter drills)
59
Q

IT threat prevention

A
  • Create policies and procedures to prevent and respond
  • Have rules regarding technology use
  • Should be in the employee handbook
  • IT training should be required
60
Q

Communicating a disease risk in the workplace includes

A
  • Notification and verification of disease risk
  • Understanding the disease and resources
  • Identify the scope of the risk
  • Determine the employer risk
  • Handle internal and HR compliance matters
61
Q

Goals of evolution in risk management

A
  • Increase transparency and accountability by measuring and reporting risk management results
  • Make sure of compliance with requirements
  • Assess the effectiveness of individual risk management strategies
  • Assess effectiveness of organization’s risk management framework (values, policies, processes and culture)
  • Continually improve by investigating incidents and identifying opportunities for improving strategies and framework
62
Q

Frequency of evaluating risk management

A
  • After every major incident
  • Agreed intervalls (ex: annually)
63
Q

After-action debriefs

A
  • Meetings to examine the effectiveness of a risk response strategy
  • Ex: workplace evacuations, in-place lockdowns for security reasons, a workplace injury or act of violence, or temporary relocation of operations.
64
Q

Incident investigations

A
  • Meetings that are more limited than after-action debriefs but similar approach
  • Ex: angry dispute that becomes physical and needs intervention, workplace injury
65
Q

Documentation of incidents

A
  • Must be well documented and reported to external parties
  • Often legally required
66
Q

Whistleblowing

A
  • Reporting of an organization’s violations of policies and processes by employees
  • Some countries protect whistelblowers from retaliation
67
Q

Quality Assurance (QA)

A

Actions organization takes to be sure it is performing work according to standards it has set and uses specified processes correctly and completly

Workplace (5 decks)

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