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Risk Governance

Risk governance frameworks provide for the systematic evaluation of how to respond to risk, evaluating disaster management, risk reduction and risk transfer. Risk reduction aims to reduce exposure, vulnerability and probability of risk occurrence; Risk transfer compensates for losses; and disaster management is the immediate action taken in response to an event and its current and future consequences.

Estimating risk

Estimating risk requires a wide range of people to be involved, so there is co-production of knowledge necessary using social learning and transdisciplinary approaches. ​

Estimating risk is a dynamic process of an on-going cycle of assessment, action, reassessment and response, allowing us to manage future risk in situations of changing uncertainties.

Estimating risk requires the management of uncertainty. Uncertainties occur in the timing and impact of future events, as well as in the social contexts of understanding future vulnerability and individual and organisational adaptive capacities.

Risk reduction aims to reduce hazards, vulnerability and exposure, as well as improving business, employee and personal resilience.

The infrequent occurrence of extreme events limits the ability to calculate probabilities and the likelihood of different consequences and understand future vulnerabilities and impact is further complicated by the very nature of having to understanding the human elements and behaviours in stressful and novel situations. 

Risk Management

The ISO 31000 standard identifies eleven principles for risk management: 

  1. Creates and protects value;

  2. Integral part of an organisation's processes;

  3. Part of decision making;

  4. Explicitly addresses uncertainty;

  5. Systematic, structured and timely;

  6. Based on the best information;

  7. Tailored;

  8. Takes into account human and cultural factors;

  9. Transparent and inclusive;

  10. Dynamic, iterative and responsive to change;

  11. Facilitations continual improvement of the organisation.

     

     

The standard outlines a five-step process for undertaking a risk assessment as:

  1. Establish the context;

  2. Identify the risks;

  3. Analyse the risks;

  4. Evaluate the risks;

  5. Treat the risk.

The following page uses the UKCIP process as a method for managing climate change risk. 

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