Best Practices for Enterprise Risk Management

• Date: December 17, 2009
• Source: my.advisor.com

In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled in descending order. Risk management should:

• create value.
• be an integral part of organizational processes.
• be part of decision making.
• explicitly address uncertainty.
• be systematic and structured.
• be based on the best available information.
• be tailored.
• take into account human factors.
• be transparent and inclusive.
• be dynamic, iterative and responsive to change.
• be capable of continual improvement and enhancement.