I SO SO 3 1 0 0 0 2 0 0 9 T R A N S L A T E D IN T O P L A IN E N G L I SH
5 . R I S K M A N A G E M E N T PR PR O C E S S
5.5 FORMULATE AND IMPLEMENT YOUR RISK TREATMENT PLANS 5.5.1 EXPLORE YOUR ORGANIZAT ORGANIZAT ION’S RISK T REATMENT OPTIONS 255
Establish a cyc lical risk treatment process. Assess your chosen risk treatment treatment option.
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Decide whether residual risk levels are tolerable once risk treatments have been i mplemented. mplemented.
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Generate new risk treatment options whenever you cannot tolerate your resi dual risk levels.
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Evaluate the effectiveness of your new risk treatment options.
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Consider your ris k treatment treatment options.
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Consider trying to avoid the risk. Consider not starting the activity that gives rise to your risk.
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Consider not continuing the activity that gives rise to your risk. Consider trying to re duce the risk.
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Consider trying to mitigate yo ur risk.
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Consider trying to prevent your ri sk.
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Consider trying to e liminate liminate your ri sk.
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Consider trying to re move the source of the risk.
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Consider trying to c hange the consequences.
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Consider trying to change the impact that consequences could have on yo ur ability to achieve objectives.
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Consider trying to c hange the probabilities.
ORGANIZATION:
YOUR LOCATION:
COMPLETED BY:
DATE COMPLETED: COMPLE TED:
REVIEWED BY:
DATE REVIEWED:
AUG 201 2010
PART 5
COPYRIGHT
Risk treatment is a continuous cyclical process. This cycle starts when you assess a risk treatment treatment option and you decide whether your residual risk level is tolerable once your treatment has been implemented. Whenever you cannot tolerate your residual risk level, you assess the effectiveness of new risk treatment options. And thus the cycle continues. Risk treatment is
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a risk modification process. It involves selecting and implementing implementing one or more mo re treatment options. Once a treatment has been implemented, implemented, it becomes a control or it modifies modifies existin e xisting g contr co ntrols. ols. You have many treatment options. You can avoid the risk, you can reduce the risk, you can c an remove remove the source of the risk, risk, you can modify modify the consequences, you can change the probabilities, probabilities, you can share the risk with others, you can simply retain the risk, or you can even increase the risk in order to pursue an opportunity. While Part 5.5.1 does not actually mention reducing, mitigating, preventing, preventing, and eliminating eliminating risk, these risk treatment options are mentioned in Part 2.25, above. That’s why we’ve added them here.
2010 201 0 BY PRAX IOM RESE ARCH GROUP LI MITED. AL L RIGHTS RESERVED.
RISK MANAGEM ENT ENT PROCESS
VERSION 1.0
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Consider trying to re duce the likelihood that unwanted consequences and impacts impacts will actually occur in the future. Consider trying to s hare the risk with others. Consider using co ntracts and risk financing to share s hare the risk with other parties. Consider retaining the exis ting risk. Consider taking or increasing the risk. Consider enduring the the risk ris k if you need to pursue an i mportant mportant opportunity.
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5.5.2 SELECT YOUR ORGANIZATION’S RISK T REATMENT REATMENT OPTIONS 278 279
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Select the most appropriate risk treatment treatment options. Consider costs and benefits when you make risk treatment decisio ns. Compare the cost with the benefit of implementing risk treatment measures.
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Consider combining several severa l treatment treatment options in o rder to reduce reduce your cost and increase your benefits.
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Consider treating risks that cannot easily be justified on economic grounds but, nevertheless, ought to be address ed.
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Consider treating low probability risks that could have seve re negative consequences. consequences. Consider the new potential risks that your risk treatment options could introduce. Consider the possibility that your chosen risk treatment could be ineffec tive or fail completely. completely. Monitor your risk treatments in order to ensure that they continue to be effective.
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Consider the possibility that your chosen risk treatments could introduce new secondary risks. Make sure that yo ur risk treatments treatments deal with these secondary risks.
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Monitor and review your risk treatments to ensure that they also deal with these secondary risks.
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Identify, maintain, and monitor the link between primary and secondary risks.
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Consider the values and perceptions of stakeholders when you make risk treatment decisio ns. Consider involving stakeholders in your risk treatment decision making process.
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Consider involving internal stakeholders whenever your risk treatment options c ould affect risk e lsewhere in your organization.
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Consider involving external stakeholders whenever your risk treatment options c ould affect other risks that stakeholders face.
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Consider how risk treatment measures will be be communicated and discussed wi th stakeholders.
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Consider selecting risk treatments that are both effective and acceptable to most stakeholders. Consider legal, regulatory, a nd other requirements requirements when you make your risk ris k treatment decisions. Consider your organization’s social responsibilities and obligations when maki maki ng risk treatment decisio ns. Consider the responsibility you have to protect the natural environment.
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