Fundamentals of Risk Management

Risk culture
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The essence of relationship skills is to build relationships with various stakeholders. 
A risk practitioner must engage with stakeholders who will be many and varied, as 
discussed in Chapter 29. The range of stakeholders in an organization will include 
customers, staff, financiers, suppliers, regulators and society (CSFSRS). With such
a wide range of stakeholders, not all of whom will be interested in risk and risk 
management, it is obvious that the risk practitioner needs excellent communication 
and relationship skills.
Confronting the opinions of some stakeholders will require risk practitioners to 
have very well-developed people skills. An example of the challenges faced by risk 
practitioners in general, and health and safety specialists in particular, is offered by 
Jeremy Clarkson, when he worked at the BBC, and who wrote in the Sunday Times 
on 4 April 2004:
Health and Safety is now so out of control that I find it nearly impossible to do my job. 
On Top Gear, we refer to the BBC health and safety people as Prohibition Officers from 
the PPD or the Programme Prevention Department.
Analytical skills
Analytical skills range widely and require strategic and logical thinking. On occasions, 
when problem solving is involved then creative lateral thinking is also a key require-
ment of the risk practitioner. Many risk practitioners are involved in quantification 
of risks, either as part of a Basel II capital requirement calculation or as part of 
an analysis to determine the appropriate level of insurance that is required.
However, analytical skills are not always mathematically based and well-developed 
problem-solving skills will be of considerable benefit to a typical risk practitioner.
In addition to analytical skills, research skills are often a requirement of many risk 
practitioners. The ability to locate and analyse information quickly and efficiently 
will be of considerable benefit to a risk practitioner.
Risk practitioners are often required to evaluate a great deal of information about 
a specific topic, find the common thread within that information and present the 
findings in a concise and logical manner. This will almost invariably be a requirement 
when the risk practitioner is drafting a written report or preparing a training course 
or presentation. The benefit of being skilled in analytical activities is at its greatest 
when the risk practitioner is seeking to facilitate a risk assessment workshop.
It is often the case in risk assessment workshops that the delegates will have
different views of the level of risk presented by a specific situation. A skilful facilitator 
is able to listen to these conflicting views and identify the underlying presumptions 
that have resulted in the different conclusions. Having identified the presumptions 
and assumptions, the skilled facilitator will then be able to challenge the different 
parties with the reasons for their differing opinions. This will be the most successful 
way of coming to a common view.
Analytical skill involves the ability to understand, challenge and articulate pro-
blems and concepts and thereby make decisions based on the available information. 
These skills include the ability to demonstrate and apply logical thinking to the gather-
ing and analysis of information, as well as the designing and testing of solutions to 

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