Explain The Risk Management Framework In Kaplan And Mikes
Introduction
Kaplan and Mikes use the Deepwater Horizon oil rig explosion as a prime example of the shortcomings of traditional risk management. An over-reliance on rules based risk management can lead to a culture of comfort and over-confidence when it comes to risk. This rules based approach is also just not sufficient or appropriate for measuring and preparing for all types of risk. A different approach, encouraging debate and challenge is required.
Explain the risk management framework outlined in Kaplan and Mikes
The starting point for Kaplan and Mikes risk management framework is to categorise the types of risks that organisations can face, with each category having its own required approach for management.
Category 1 – preventable risks
Kaplan & Mikes describe …show more content…
Bags are not permitted.
• Security clearance for all staff – All new staff go through a strict security screening process to ensure they are of good character and do not present an obvious risk of criminality, nor are they connected to any criminal elements through family etc.
• Dual control access to safes – only supervisors have access to the safes, and no one supervisor can operate both locks on a safe.
Managing the risk of external attacks is slightly different. External theft could be viewed as an external operational risk. There are a number of methods that criminal gangs use to try and steal cash from banks and other cash holding businesses. Some of these are as old as time, such as armed robbery. Some are slightly newer, such as tiger kidnaps. Once a new method of theft is attempted and is successful, more attempts of this nature will take place. The bank’s security team can put new measures in place to prevent these types of crimes from being successful, in which case these move to preventable risks and some of the measures mentioned above can be successful in preventing these
Kaplan and Mikes use the Deepwater Horizon oil rig explosion as a prime example of the shortcomings of traditional risk management. An over-reliance on rules based risk management can lead to a culture of comfort and over-confidence when it comes to risk. This rules based approach is also just not sufficient or appropriate for measuring and preparing for all types of risk. A different approach, encouraging debate and challenge is required.
Explain the risk management framework outlined in Kaplan and Mikes
The starting point for Kaplan and Mikes risk management framework is to categorise the types of risks that organisations can face, with each category having its own required approach for management.
Category 1 – preventable risks
Kaplan & Mikes describe …show more content…
Bags are not permitted.
• Security clearance for all staff – All new staff go through a strict security screening process to ensure they are of good character and do not present an obvious risk of criminality, nor are they connected to any criminal elements through family etc.
• Dual control access to safes – only supervisors have access to the safes, and no one supervisor can operate both locks on a safe.
Managing the risk of external attacks is slightly different. External theft could be viewed as an external operational risk. There are a number of methods that criminal gangs use to try and steal cash from banks and other cash holding businesses. Some of these are as old as time, such as armed robbery. Some are slightly newer, such as tiger kidnaps. Once a new method of theft is attempted and is successful, more attempts of this nature will take place. The bank’s security team can put new measures in place to prevent these types of crimes from being successful, in which case these move to preventable risks and some of the measures mentioned above can be successful in preventing these