Question

Explain any three strategies to manage risk.

Answer 1

Risk management can also be implemented through the acceptance of risk.

1. Make a plan for risk management

Essential item need to include in risk management plan are,

• a list of individual risk
• a rating of each risk based on likelihood and impact
• an assesment of current controls
• a plan of action

The next step to consider the effectiveness of those actions,

• Very inadequate
• inadequate
• satisfatory
• strong
• very strong

Then the final element of your plan details the action plan to take in order to manage the risk more effectively

2. Decide how to handle each risk

There are four main strategies,

• Avoid it
• Reduce it
• Transfer it
• Accept it

3. Monitor the risk

Putting measures in place is not enough, and also need to check whether they are working. Need to monitor on regular basis to identify and deal with new risks.