Sime Darby Risk Management
1. INTRODUCTION
Risk management is a systematic method to identify, analyze and monitoring the risk involved in any activities and process. It also a central part of any organization’s strategic management. It is the process whereby organizations methodically address the risks attaching to their activities with the goal of achieving sustained benefit within each activity and across the portfolio of all activities. Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures (at any phase in design, development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attack from an adversary, or events of uncertain or unpredictable root-cause.
2. THE IMPORTANCE OF RISK MANAGEMENT
1)Investor information
Risk management report is very important to the investor for their decision making. Investor’s need to decide either the company is potential to make profit or not from their risk management report.
2)Achieve objectives of the firm
Risk management is very important for company to achieve their objectives. It is because they must know all the risk and trying to avoid the risk for achieve the company objectives.
3)Reduce cost and financial implications
The effective risk management can help companies to reduce their cost and effect of the financial implications. For the example, from the risk management, Sime Darby can avoid the loss of 2 billion.
4)Effective use of existing skills and experience
The good risk management process
Risk management is a systematic method to identify, analyze and monitoring the risk involved in any activities and process. It also a central part of any organization’s strategic management. It is the process whereby organizations methodically address the risks attaching to their activities with the goal of achieving sustained benefit within each activity and across the portfolio of all activities. Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures (at any phase in design, development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attack from an adversary, or events of uncertain or unpredictable root-cause.
2. THE IMPORTANCE OF RISK MANAGEMENT
1)Investor information
Risk management report is very important to the investor for their decision making. Investor’s need to decide either the company is potential to make profit or not from their risk management report.
2)Achieve objectives of the firm
Risk management is very important for company to achieve their objectives. It is because they must know all the risk and trying to avoid the risk for achieve the company objectives.
3)Reduce cost and financial implications
The effective risk management can help companies to reduce their cost and effect of the financial implications. For the example, from the risk management, Sime Darby can avoid the loss of 2 billion.
4)Effective use of existing skills and experience
The good risk management process