Fundamentals of Risk Management

Compliance requirements of owning a car (minimize the compliance risks) 
1. Insufficient and/or inadequate 
third-party car insurance
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Buy insurance to cover all uses of the car
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Read policy terms and conditions 
2. Inattentive or aggressive driving 
results in traffic offence(s) 
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Obey all road signs and instructions
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Do not react to aggressive driving of 
others 
3. Tyres in poor condition and other 
maintenance obligations 
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Arrange routine safety checks
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Check condition of tyres at start of journey 
TAbLE 
25.4
Controls for the risks of owning a car

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26
Risk training and 
communication
Consistent response to risk
One of the main reasons for communicating risk information and providing risk 
training is to ensure that a consistent response to similar risk events is always 
achieved. This can only be ensured by sharing information and experience. A consistent 
response is required in relation to hazard, control and opportunity risks. When an 
organization has an intranet, this is an ideal way of achieving a consistent response 
to risk by ensuring that appropriate information is readily available.
As well as a consistent response to individual risks, consistent risk protocols also 
need to be defined and communicated. Part of ensuring a consistent response is
to identify risks in advance and confirm the controls that will be in place for them. 
This approach is relevant to strategic, project and operational risks, and training
and communication protocols should be introduced to increase the consistency of 
response to risk across the organization.
It should be a requirement of every organization that a risk assessment is attached 
to each capital expenditure request. This risk assessment should include both the 
risks that the project is seeking to manage and the risks within the project itself.
The risks within the project may affect the ability to deliver the project on time, 
within budget and to specification.
Risk assessment attached to strategic analysis is also a vitally important issue
and is part of ensuring a consistent response to risk. Production of an ‘issues manual’ 
as a means of communicating risk across the organization and ensuring a consistent 
response to risks may also be valuable. The issues manual will identify risks, circum-
stances and other events where a response is required. The provision of adequate 
information, supervision and training will ensure that consistent and appropriate 
risk management procedures are more likely to be followed.
An important consideration related to the need for consistent responses to risk is 
when a new risk appears or an existing risk changes substantially. In these circum-
stances, risk escalation may be required so that the changed circumstances are
viewed by senior management. The design and introduction of robust risk escalation 
procedures is required, with appropriate training provided in these procedures.