Risk Management

Question 1

Define the term “risk management”.

Answer 1

Risk management is a logical process of weighing the potential costs of risks against the possible benefits of allowing those risks to stand uncontrolled. It is a decision making process designed to identify hazards systematically, assess the degree of risk, and determine the best course of action.

Question 2

What four basic principles of risk management are useful when trying to determine what constitutes an “acceptable” level of risk?

Answer 2

1. Accept no unnecessary risk - Unnecessary risk is that which carries no commensurate return in terms of benefits or opportunities.
2. Make risk decisions at the appropriate level - The decision-maker must be authorized to accept levels of risk typical of the planned operation.
3. Accept risk when benefits outweigh the costs - All identified benefits should be compared against all identified costs.
4. Integrate risk management into planning at all levels - Risks are more easily assessed and managed in the planning stages of an operation.

Question 3

What is the risk management process?

Answer 3

Risk management is a simple process which identifies operational hazards and takes reasonable measures to reduce risk to personnel, equipment, and the mission.

Question 4

Explain the six steps involved in risk management process.

Answer 4

1. Identify the hazard - Experience, common sense, and specific analytical tools help identify risks.
2. Assess the risk - Determine the probability and severity of an accident that could result from exposure to the hazards.
3. Analyze risk control measures - Investigate specific strategies and tools that reduce, mitigate, or eliminate risk.
4. Make control decisions - The decision-maker must choose the best control or combination of controls, based on the analysis in steps 1 and 2.
5. Implement risk controls - A plan for applying the selected controls must be formulated, and the time, materials, and personnel needed to put these measures in place must be provided.
6. Supervise and review - Once controls are in place, the process must be reevaluated periodically to ensure their effectiveness.

Question 5

How will you implement the risk management process?

Answer 5

1. Apply the steps in sequence -