Fundamentals of Risk Management

Learning from controls
The various examples considered in this chapter give an oversight of the wide range 
of hazard risks that can be faced by an organization. There are many other examples 
of risks that have been discussed throughout this book. A constant feature of all 
types of hazard risks is that decisions have to be made on the most appropriate and 
cost-effective controls that should be introduced.
Uncertainty in terms of likelihood, impact and consequences is at the heart of risk 
management. Both Figures 23.2 and 23.4 illustrate that judgement is required when 
undertaking risk analysis and risk evaluation, as well as when consideration is being 
given to existing controls and the need for additional controls. In all cases, judge-
ment based on the best available information is required.
Another important advantage of seeking to learn from controls is that unnecessary 
and inappropriately complex controls will be identified and steps can be taken to 
remove the control, modify it or replace it with a more cost-effective option. Risk 
assessment activities should take account of the continuing review of controls that
FIgURE 
23.3
Learning from controls
• Management oversight
• Post-implementation review
• Decide adequacy of control
4. Learning
(continuous improvement)
• Investment appraisal
• Design of control
• Feasibility study
1. Planning
(strategic and business objectives)
• Value added by control
• Monitor effectiveness
• Evaluate risk performance
3. Measuring
(key performance indicators)
• Project risk management
• Plan implementation
• Implementation of control
2. Implementing
(core processes and functions)

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Risk strategy