implementing an effective risk management strategy based upon knowledge peter scott
TRANSCRIPT
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Implementing an effective risk management strategy based
upon knowledge
Peter Scott
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PETER SCOTT CONSULTING
What is Risk?
“Chance of bad consequences”
The concise Oxford Dictionary
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PETER SCOTT CONSULTING
What is Knowledge?
“The sum of what is known”
The concise Oxford Dictionary
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PETER SCOTT CONSULTING
Risk
Management
Knowledge
Management
An integrated strategy
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PETER SCOTT CONSULTING
Law Firm Risks
Peop
le
Op
eration
alRegulatory
IT
Co
mp
etit
ion
/bu
sin
ess
Eco
no
mic
,p
olit
ical
,fi
scal
Financial
Asset
Reputational
Management
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PETER SCOTT CONSULTING
Risk/KM
Risks are inter-related
Failure to manage knowledge
involves widespread risk
KM is an essential part of an
integrated risk management
strategy
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PETER SCOTT CONSULTING
Example: Reputational Risk
OperationalPeopleRegulatoryIT Competition & Business MarketsEconomic, Political & FiscalFinancial Assets
Interaction with Knowledge/KM?
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PETER SCOTT CONSULTING
Law Firm Risks
Peop
le
Op
eration
alRegulatory
IT
Co
mp
etit
ion
/bu
sin
ess
Eco
no
mic
,p
olit
ical
,fi
scal
Financial
Asset
Reputational
Management
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PETER SCOTT CONSULTING
Management Risks
Is your management in control of its knowledge and managing your risk?
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PETER SCOTT CONSULTING
Your Risks?
Where does the knowledge relating to your risks reside?
Can you access it?
Can you capture it?
Can you maintain and upgrade it?
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PETER SCOTT CONSULTING
Implementing a Risk Strategy
DIAGNOSIS
Identification and assessment
MITIGATION
Control, transfer and avoidance
MONITORING
Tracking and reporting
When a risk crystallises
LIMITATION
Minimising the effect of
crystallised risks
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PETER SCOTT CONSULTING
Risk Identification Involves:
Being management drivenBrainstormingFacilitated discussionsQuestionnairesTop down/bottom up
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PETER SCOTT CONSULTING
Risk Diagnosis
Assess severity of high-level risks
Identify high level risks
Set criteria for assessing risks
Identify detailed risks
Assess severity of detailed risks
Risk map
Risk summary
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PETER SCOTT CONSULTING
Risk Assessment
Incidence - probabilityImpact - severity
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PETER SCOTT CONSULTING
Risk Mapping
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PETER SCOTT CONSULTING
Risk Mitigation
Designed to:ReduceAvoidAcceptTransfer
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PETER SCOTT CONSULTING
Risk mitigationRisk map
Risk summary
Consider impact/probability
correlation
Required controls
summary
Insurance requirements
summary
Contingency plan
requirements
Residual risk
summary
Consider available mitigation techniques
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PETER SCOTT CONSULTING
Monitoring involves
Tracking and reportingComparing actual outturns to preset indicatorsConfirming effectiveness of risk responsesReporting compliance and exceptions
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PETER SCOTT CONSULTING
Risk monitoringRequired controls
summaryContingency
plan requirements
Insurance requirements
summary
Set risk indicators and methods to monitor them
Annual Risk Management
Report
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PETER SCOTT CONSULTING
Limitation involves
Risk crystalisation scenarios Contingency plansLimitation proceduresPost event assessment
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PETER SCOTT CONSULTING
Use of IT Use an integrated risk management system to quantify, assess and control risk by :
streamlining diagnosis, mitigation and monitoring
embedding common risk management procedures
providing information access to all who need it
creating and maintaining one central, up to date risk database
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PETER SCOTT CONSULTING
Example – Risk Summary – an overview of risks
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PETER SCOTT CONSULTING
Example – Detailed Risks
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PETER SCOTT CONSULTING
Example - Controls
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PETER SCOTT CONSULTING
Example - Questionnaires
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PETER SCOTT CONSULTING
Example – Final Evaluation
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PETER SCOTT CONSULTING
Advantages of a formal risk management process?
Structured approach focuses on key risksElimination of redundant proceduresComfort / assurance to PI insurersUniversal application to all risk areasContinuous monitoring ensures management of risk is “lived” day to day
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PETER SCOTT CONSULTING
Risk/KM
Risk
Management
Knowledge
Management
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PETER SCOTT CONSULTING
Implementing a Risk Strategy
DIAGNOSIS
Identification and assessment
MITIGATION
Control, transfer and avoidance
MONITORING
Tracking and reporting
When a risk crystallises
LIMITATION
Minimising the effect of
crystallised risks
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PETER SCOTT CONSULTING
Any questions?