Risk assessment and management for resilient

organizations

Dr Nicodemus Nyandiko

COURSE DIRECTOR
UNECA/IDEP Webinar two
 Objectives of the Webinar
• Understand the concepts of risk management and
Obje
ctive approaches used in risk assessment
1

• Analyze the weaknesses in organizations and key risk

Obje
ctive areas
2

• Explain the characteristics and principles of resilient

Obje
ctive organizations
3

• Explain transformations needed for resilience in

Obje organizations
ctive
4
Principles of risk management, ISO, 3100

.
Risk assessment and management process
● Is a systematic process through which
potential risks in an organization,
project, activity or undertaking is
evaluated
● Risk assessment entails identifying,
measuring, estimating and
prioritizing risk in organizations.
● Assessing the wrong list of risks or an
incomplete list of risks is futile as it
exposes the organization to the actual
risk, or results in wastage of
resources mitigating unreal threats.
Is the identification, assessment,
evaluation, and prioritization of risks
followed by coordinated and
economical application of resources to
minimize, monitor, and control the
probability or impact of unfortunate
events or to maximize the realization of
opportunities.
 Why risk management

Keep pace with

Technical innovation
changing environment

Organizational risk
Changing behavior
culture

Risk management
System complexity should be at the top of
organizations
 Risk assessment approaches
• Qualitative – self; assessment; risk
mapping; risk indicators
• Quantitative –uses metrics or statistics
to estimate organization’s risk
position.
• Risk avoidance - eliminates the
hazard and vulnerabilities in
organizations
• Risk reduction – reduces losses
through a staggered approach
• Risk Transfer – uses third party
to handle the risk such as
insurance, outsourcing, etc.
• Risk acceptance -
 Risk assessment success factors
• Involve senior management
• Design and adopt a framework for risk management
• Monitor risks regularly/review
• Embed management of risk
• Clear commitment of staff to the process
• Link achievement of organizational objectives to risk
management
 Likely Negative impacts of Risk Assessment.
● Loss of Integrity- respect, reputation and trust may be eroded
● Loss of Availability, e.g. Due to forced shut-down by regulators.
● Loss of confidentiality- some confidential system information may be leaked or will have
to be shared with regulators and the general public,
● Talent flight- when the employees start fearing for their safety and the security of their
jobs,
● Stakeholder flight- my suppliers, distributors of goods, shareholders who may not want to
be associated with the emerging negative reputation, or to absorb losses resulting from
the impending disaster
● The ability of a system, community
or society exposed to hazards to
resist, absorb, accommodate to and
recover from the effects of a hazard
in a timely and efficient manner”
● “The ability of a social or ecological
system to absorb disturbances while
retaining the same basic structure
and ways of functioning, the
capacity for self-organization, and
the capacity to adapt to stress and
change”
● Purpose: In order to survive
● How can it be improved?
Organizational resilience
Fairness

Reputation Governance

Resilient
organizati
Human on Vision
resources

Culture
& Partnerships
Leadership
 Frequent
changes in
management

Budget
Project slippage
overspend
Early
warning
signals

Adverse media Unclear

coverage communication
 Risk culture and transformation

● Good business practices and effective

management of risk
● Risk culture at the top:
○ Risk leadership
○ Responding to bad news
○ Risk accountability
○ Performance targets
○ Risk champion
○ Risk communication and reporting
 Shared
vision,
mission, Understan
Effective purpose, ding of
risk objectives organizati
managem
onal
ent
context
Contributio
Absorb,
n from
adapt and
technical
effectively
and Principles respond to
scientific of
resilience change
areas
Good
Coordination
governanc
across
e and
managemen
managem
t principles
Knowled ent
Diversity of
ge and
skills and
experien
leadership
ce