Fundamentals of Risk Management

Term
Definition
reference
Accept
See ‘Tolerate’
Chapter 15
Avoid
See ‘Terminate’
Chapter 15
Benchmark test
Established criteria to determine whether
a risk is significant to the organization
Table 12.1
Business continuity plan
(BCP)
Plan to ensure continuity of business
operations in the event of a serious incident
that impacts the organization
Chapter 18
Business impact analysis
(BIA)
Analysis to assess the potential damage,
loss or disruption that would be caused by
the failure of critical business processes
Chapter 18
Business model
Customer offering that utilizes resources, 
underpinned by resilience (CORR)
Chapter 20
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Glossary of terms
437
Term
Definition
reference
Captive insurance company Subsidiary, owned by an organization, that
provides insurance for the organization and
sometimes for customers of the organization
Figure 17.1
Chief risk officer (CRO)
Job title for senior risk manager appointed
to board or executive of an organization
Chapter 22
Communication,
relationship, analytical and
management (CRAM)
Set of people skills that are required by risk 
management professionals, in addition to 
their risk management and business 
technical skills
Chapter 27
Compliance risk
Category of risk that is associated with the 
management of mandatory obligations
Chapter 3
Consequences
Effect on the strategic, tactical, operational 
and compliance (STOC) core processes 
resulting from a risk materializing
Chapter 19
Control
Actions to reduce the likelihood and/or 
magnitude of a risk. Hazard controls can be
preventive, corrective, directive or detective
(PCDD)
Chapter 16
Control environment
Attitude, awareness and culture of the
organization regarding risk management
and/or internal control, referred to in the
COSO (ERM) as the ‘internal environment’
Chapter 33
Control risk
Category of risk that is associated with
the management of uncertainty
Chapter 3
Control risk
self-assessment
(CRSA)
Self-audit exercise completed by a manager
or director to report on current status of
controls and control activities
Chapter 34
Core process
Set of co-ordinated business activities to 
deliver a stakeholder expectation that may 
be strategic, tactical, operational or 
compliance (STOC)
Figure 29.1
Corporate governance
Set of activities and policies that control
the way in which an organization is directed,
administered and/or controlled
Figure 28.1

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