The paper draws a distinction between risk-based and risk-informed [RIDM] decision making process and highlights the importance of RIDM is corporate sustainability.
It provides a general overview of enterprise risk management principles which can help to transform corporate from risk exposure to the risk protected. Consideration for basic steps in Risk Management Process are critically and logically analysed
The underlying premise of enterprise risk management is that the Company exists to provide value for its stakeholders – customers, employees, and shareholders. Like any business, every Company faces some uncertainty, and the challenge for management is to determine how much uncertainty to accept as it strives to grow stakeholder value. Uncertainty presents both risk and opportunity, with the potential to erode or enhance value. Enterprise risk management enables senior management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Value is maximized when management sets strategy and objectives to strike an optimal balance between growth and return goals and related risks, and efficiently and effectively deploys resources in pursuit of the entity’s objectives. These capabilities inherent in enterprise risk management help management achieve the Company’s performance and profitability targets, and minimize loss of resources. Enterprise risk management helps ensure effective reporting and compliance with laws and regulations, and helps avoid damage to the Company’s reputation and associated consequences. In sum, enterprise risk management helps the Company get to where it wants to go and avoid pitfalls and surprises along the way. Enterprise risk management encompasses:
• Aligning Risk Appetite and Strategy
• Enhancing Risk Response Decisions
• Reducing Operational Surprises and Losses
• Identifying and Managing Multiple and Cross-Enterprise Risks
• Seizing Opportunities
• Improving Deployment of Capital
• Leveraging Talent, Structure, Process, and Capital
Aligning strategy decisions with risk appetite
Presented by David Shearer
Monday 10th October 2016
APM North West branch and Risk SIG conference
Alderley Park, Cheshire
It provides a general overview of enterprise risk management principles which can help to transform corporate from risk exposure to the risk protected. Consideration for basic steps in Risk Management Process are critically and logically analysed
The underlying premise of enterprise risk management is that the Company exists to provide value for its stakeholders – customers, employees, and shareholders. Like any business, every Company faces some uncertainty, and the challenge for management is to determine how much uncertainty to accept as it strives to grow stakeholder value. Uncertainty presents both risk and opportunity, with the potential to erode or enhance value. Enterprise risk management enables senior management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Value is maximized when management sets strategy and objectives to strike an optimal balance between growth and return goals and related risks, and efficiently and effectively deploys resources in pursuit of the entity’s objectives. These capabilities inherent in enterprise risk management help management achieve the Company’s performance and profitability targets, and minimize loss of resources. Enterprise risk management helps ensure effective reporting and compliance with laws and regulations, and helps avoid damage to the Company’s reputation and associated consequences. In sum, enterprise risk management helps the Company get to where it wants to go and avoid pitfalls and surprises along the way. Enterprise risk management encompasses:
• Aligning Risk Appetite and Strategy
• Enhancing Risk Response Decisions
• Reducing Operational Surprises and Losses
• Identifying and Managing Multiple and Cross-Enterprise Risks
• Seizing Opportunities
• Improving Deployment of Capital
• Leveraging Talent, Structure, Process, and Capital
Aligning strategy decisions with risk appetite
Presented by David Shearer
Monday 10th October 2016
APM North West branch and Risk SIG conference
Alderley Park, Cheshire
Every organization needs to adapt to the ever-changing business environment. Sensing this need, we have come up with these content-ready change management PowerPoint presentation slides. These change management PPT templates will help you deal with any kind of an organizational change. Be it with people, goals or processes. The business solutions incorporated here will help you identify the organizational structure, create vision for change, implement strategies, identify resistance and risk, manage cost of change, get feedback and evaluation, and much more. With the help of various change management tools and techniques illustrated in this presentation design, you can achieve the desired business outcomes. This business transition PowerPoint design also covers certain related topics such as change model, transformation strategy, change readiness, change control, project management and business process. By implementing the change control methods mentioned in the presentation, you will be able to have a smooth transition in an organization. So, without waiting much, download our extensively researched change management framework presentation. With our Change Management Presentation slides, understand the need for change and plan to go through it without any hassles.
A brief overview of financial risk management strategies which will be covered in a 2 day workshop on Emerging Markets Investment & Risk Management Strategies on Sept 15-16 2011 in Singapore.
Enterprise Risk Management - Aligning Risk with Strategy and PerformanceResolver Inc.
COSO, which has provided global thought leadership and guidance on internal control, enterprise risk management, and fraud deterrence for over three decades, recently released a draft update to the original COSO ERM Framework. This framework is widely used by organizations to enhance their ability to manage uncertainty, gauge risk, and increase stakeholder value. However, significant new risks have emerged since the Framework was released, demanding heightened board awareness and oversight of risk management, as well as improved risk reporting. For those organizations exploring ESRM – these themes will be strikingly familiar and the lessons learned, highly relevant.
Presentation by: Bob Hirth, Global Chairman of COSO.
Risk management is an integral part of business management. This set of principles was developed by the industry for the industry. They have been drafted to make them so practical that they will resonate with any financial organization.
Why You Should Prioritize Third Party Risk Management (TPRM) in Today's Marke...Resolver Inc.
Did you know that 63% of data breaches are linked to third party access, and this number is on the rise? This presentation explores the increasing priority of Third Party Risk Management (TPRM) in today’s marketplace. Learn why TPRM should play a critical role in your overall Corporate Risk Management Strategy and best practices for how to implement a successful TPRM program in your own organization.
Every organization needs to adapt to the ever-changing business environment. Sensing this need, we have come up with these content-ready change management PowerPoint presentation slides. These change management PPT templates will help you deal with any kind of an organizational change. Be it with people, goals or processes. The business solutions incorporated here will help you identify the organizational structure, create vision for change, implement strategies, identify resistance and risk, manage cost of change, get feedback and evaluation, and much more. With the help of various change management tools and techniques illustrated in this presentation design, you can achieve the desired business outcomes. This business transition PowerPoint design also covers certain related topics such as change model, transformation strategy, change readiness, change control, project management and business process. By implementing the change control methods mentioned in the presentation, you will be able to have a smooth transition in an organization. So, without waiting much, download our extensively researched change management framework presentation. With our Change Management Presentation slides, understand the need for change and plan to go through it without any hassles.
A brief overview of financial risk management strategies which will be covered in a 2 day workshop on Emerging Markets Investment & Risk Management Strategies on Sept 15-16 2011 in Singapore.
Enterprise Risk Management - Aligning Risk with Strategy and PerformanceResolver Inc.
COSO, which has provided global thought leadership and guidance on internal control, enterprise risk management, and fraud deterrence for over three decades, recently released a draft update to the original COSO ERM Framework. This framework is widely used by organizations to enhance their ability to manage uncertainty, gauge risk, and increase stakeholder value. However, significant new risks have emerged since the Framework was released, demanding heightened board awareness and oversight of risk management, as well as improved risk reporting. For those organizations exploring ESRM – these themes will be strikingly familiar and the lessons learned, highly relevant.
Presentation by: Bob Hirth, Global Chairman of COSO.
Risk management is an integral part of business management. This set of principles was developed by the industry for the industry. They have been drafted to make them so practical that they will resonate with any financial organization.
Why You Should Prioritize Third Party Risk Management (TPRM) in Today's Marke...Resolver Inc.
Did you know that 63% of data breaches are linked to third party access, and this number is on the rise? This presentation explores the increasing priority of Third Party Risk Management (TPRM) in today’s marketplace. Learn why TPRM should play a critical role in your overall Corporate Risk Management Strategy and best practices for how to implement a successful TPRM program in your own organization.
Day-to-day tactical decisions are relatively easy, but when it comes to big, thorny strategic decisions, there is often great conversation, but limited action. Using a framework, leaders can best organize their efforts.
If you'd like to ensure you have a game plan for addressing multiple possible future states, this white paper will help frame your conversations.
Risk and Geopolitics (Singapore - November 2009)Peter Cockcroft
This slide was presented in Grand Copthorne Waterfront in Singapore on November 23-25, 2009. It talks about the definition of risk and how to manage and monitor it.
M_o_R is intended to help organisations put in place an effective framework for risk management. This will help them make informed decisions about the risks that affect their strategic, programme, project and operational objectives. The guide provides a route map for risk management, bringing together basic concepts, an approach, a process with a set of interrelated process steps, and pointers to more detailed sources of advice on risk management techniques and specialisms. It also provides advice on how the principles, approach and processes should be embedded, reviewed and applied differently depending on the nature of the objectives at risk.
This three day Management of Risk (M_o_R) course is designed to illustrate this best practice framework and give candidates an understanding of risk as it should be managed across an organisation. Within project and programme environments there will always be risk which needs to be identified, analysed and managed. Other areas of an organisation will also be exposed to risks as operational functions are carried out. M_o_R provides guidance on how best to deal with all these areas.
The Guide has been written by leading industry experts and is part of the ‘Swirl’ set of best practices managed by AXELOS, which includes ITIL, PRINCE2 & MSP methodologies. This training event is designed to prepare candidates to manage risks in a controlled and structured way by examining the M_o_R guide. Examinations are available during the event for candidates to achieve the Foundation level certification.
Syzygal is a globally Accredited Training Organisation and Accredited Courseware Provider for the M_o_R education & certification program. We are accredited by the following Examination Institutes: APMG, EXIN, Loyalist and PEOPLECERT.
Mastering Information Technology Risk ManagementGoutama Bachtiar
This is the presentation slide as part of the courseware utilized when delivering Information Technology Risk Management training - workshop on May 2013.
Third-Party Risk Management: Implementing a StrategyNICSA
Two Part Series: Part I of II
Third-Party Risk Management: Implementing a Strategy
Sleep Better at Night: Learn techniques to manage risks associated with third-party relationships.
GRCM Is a practical experience on risk management or financial control and managerial experiences pre-requisite knowledge in accounting ,auditing ,finance and risk based
Minimising reputation risks through sustainable change delivery assessment - ...Michael Young
This presentation provides an overview of the reputation risks facing organisations and how they can be minimised through a sustainable change delivery assessment.
Overcome Risk Using Process Management and ImprovementCathy Cecere
Process management helps to provide a line of sight from strategy through execution of organizational initiatives. Akin to the business analysis (BA) requirements discipline, this traceability enables performance maturity, better communication, clearer roles and responsibilities, and good governance. Clarification of problems or opportunities for improvement is integral to business analysis and process management. In each, you must elicit and clearly state a specific problem that quantifiably affects business/operation and that ultimately matters to your customers. Process management is
• an integral part of business analysis, implementation, improvement, and sustainability
• solves problems
• expedites risk identification, mitigation, and impact
In this webinar I will explain how to:
• tie process management to organizational strategy
• use process management as a foundation of good decision making, change management, and governance
• increase efficiency and value optimization throughout the organization.
Similar to RISK-INFORMED DECISION-MAKING PROCESS FOR CORPORATE SUSTAINABLE DEVELOPMENT (20)
The presentation explores how risk management can be agile and robust to be able to respond to the dynamics of the environment especially with respect to the global Covid-19 pandemic.
This paper argues that SMEs are indeed engine of growth in most economies of the world, including Nigeria and goes further to propose strategies for propelling the sector for stellar and optimal performance
This paper was presented at the Future of SMEs Banking Conference organised by Business a.m on 27th November, 2019 in Lagos. For SMEs to be able to play the role of engine of growth, Banks and other financial services provider need to be creative in managing funding and credit risks.
This paper which I presented at a training program provides invaluable input into the concept, principles, features of Public Sector Reforms. It also explores the role of international organisations in PSR.
The paper describes the visioning process and how effective leadership can help transform individuals that would replace them through effective coaching for corporate sustainability.
This presentation highlights the point that great leaders are visionaries and usually transform, empower and mentor others to ensure sustainability of organisations.
This presentation provides a highlight of the key issues in the management of Market Risk. It touches briefly some of the elements of the Basel 2 Accord with respect to Market Risk
Some risks can be partially mitigated through thoughtfully designed, diversified investment strategies.Frontier markets offer an unfolding opportunity for investors who are seeking growth along with global diversification. But the risks of investing in these less mature markets need to be well understood.
Frontier-market investors should: · Make sure they are thoroughly educated about the asset class and its potential risks, including keeping up to date on developments in this fast-moving area of investment, especially since the “frontier” label refers to a shifting roster of nations. For example, Qatar and the United Arab Emirates graduated from frontier to emerging market status in 2014. ·Need to gain exposure to the asset class through a broadly diversified approach. · Incorporate an allocation to frontier markets in a broadly diversified portfolio. There is no doubt that the risks and costs of investing in frontier markets are greater than in emerging and developed markets.
But when it comes to some risk factors, such as fiscal stability, frontier markets may be less risky than many assume. Beyond that, some risks can be partly mitigated through thoughtfully designed, diversified investment strategies. It is possible that in some situations, adding a frontier markets allocation to a portfolio may actually lower its overall risk, given historically low correlations between FM, EM and developed market indices.
Additionally, frontier markets offer growth potential, and low correlations within markets and with other asset classes, along with relatively attractive valuations. These nascent markets represent an opportunity that growth-minded investors should not overlook.
This paper identifies the risks in financial inclusion from the perspective of both the user and provider with a viewing to staying out of the threat curve. The paper was actually delivered at the 1st Annual Financial Inclusion Summit in Nairobi, Kenya on July 1, 2016 at Sarova Hotel.
More from Dr. Emmanuel ABOLO, fica,fnimn,ficn,sirm (20)
Have you ever wondered how search works while visiting an e-commerce site, internal website, or searching through other types of online resources? Look no further than this informative session on the ways that taxonomies help end-users navigate the internet! Hear from taxonomists and other information professionals who have first-hand experience creating and working with taxonomies that aid in navigation, search, and discovery across a range of disciplines.
This presentation, created by Syed Faiz ul Hassan, explores the profound influence of media on public perception and behavior. It delves into the evolution of media from oral traditions to modern digital and social media platforms. Key topics include the role of media in information propagation, socialization, crisis awareness, globalization, and education. The presentation also examines media influence through agenda setting, propaganda, and manipulative techniques used by advertisers and marketers. Furthermore, it highlights the impact of surveillance enabled by media technologies on personal behavior and preferences. Through this comprehensive overview, the presentation aims to shed light on how media shapes collective consciousness and public opinion.
This presentation by Morris Kleiner (University of Minnesota), was made during the discussion “Competition and Regulation in Professions and Occupations” held at the Working Party No. 2 on Competition and Regulation on 10 June 2024. More papers and presentations on the topic can be found out at oe.cd/crps.
This presentation was uploaded with the author’s consent.
Acorn Recovery: Restore IT infra within minutesIP ServerOne
Introducing Acorn Recovery as a Service, a simple, fast, and secure managed disaster recovery (DRaaS) by IP ServerOne. A DR solution that helps restore your IT infra within minutes.
0x01 - Newton's Third Law: Static vs. Dynamic AbusersOWASP Beja
f you offer a service on the web, odds are that someone will abuse it. Be it an API, a SaaS, a PaaS, or even a static website, someone somewhere will try to figure out a way to use it to their own needs. In this talk we'll compare measures that are effective against static attackers and how to battle a dynamic attacker who adapts to your counter-measures.
About the Speaker
===============
Diogo Sousa, Engineering Manager @ Canonical
An opinionated individual with an interest in cryptography and its intersection with secure software development.
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...Orkestra
UIIN Conference, Madrid, 27-29 May 2024
James Wilson, Orkestra and Deusto Business School
Emily Wise, Lund University
Madeline Smith, The Glasgow School of Art
Supercharge your AI - SSP Industry Breakout Session 2024-v2_1.pdf
RISK-INFORMED DECISION-MAKING PROCESS FOR CORPORATE SUSTAINABLE DEVELOPMENT
1. RISK-INFORMED DECISION-MAKING PROCESS FOR
CORPORATE SUSTAINABLE DEVELOPMENT
By:
MAY 4-5 2021
DR. EMMANUEL MOORE ABOLO, PhD [Econs]—The Risk Master
Director General, The Economic Thinktank Centre Limited &
GMD/CEO, The Risk Management Academy Limited
08021003297; mail@drabolomoore.com;info@theriskacademy.org
KEYNOTE PAPER PRESENTED AT THE VIRTUAL
SUSTAINABILITY DRIVE 2021 CONFERENCE
ORGANISED BY 1Q-EXCEL, DUBAI, UAE.
3. OUTLINE
• RISK-BASED Vs RISK-INFORMED DECISION-MAKING
• THE RISK-INFORMED DECISION-MAKING PROCESS
• RIDM AND CORPORATE SUSTAINABILITY
• RISK-INFORMED DEVELOPMENT AND ITS CORE AIMS
• BENEFITS OF RISK-INFORMED DECISION-MAKING
• CONCLUDING REMARKS
RIDM PROCESS FOR SUSTAINABILITY 3
5. RISK-BASED Vs RISK-INFORMED DECISION-MAKING
RIDM PROCESS FOR SUSTAINABILITY 5
▪ Risk is uncertainty that matters [ affects objectives]
▪ Risk and decision making go hand-in-hand;
▪ All decisions require alternatives or options; Decisions where there are no alternatives
cannot be described as decisions at all;
▪ Decisions are required in the face of options and uncertainties or in the face of
incomplete information and where the outcome matters;
▪ All important decisions inherently involve risk. All true decisions must be risk-based;
▪ There are all kinds of risk-based concepts: RBIA; RBS;RBP;
▪ A risk-based decision-making process provides a defensible basis for making
decisions and helps to identify the greatest risks and prioritize efforts to minimize or
eliminate them;
▪ It is based primarily on a narrow set of model-based risk metrics, and generally does
not lead much space for interpretation.
▪ Considerations of cost, feasibility and stakeholder concerns are generally not a part of
risk-based decision-making, which is typically conducted by technical experts, without:
✓ public consultation; and/or
✓ stakeholder involvement/engagement.
7. RISK-BASED Vs RISK-INFORMED DECISION-MAKING
RIDM PROCESS FOR SUSTAINABILITY 7
▪ In contrast, risk-informed decision-making [RIDM] is a deliberative process
that uses a set of performance measures, together with other considerations, to
“inform” decision-making.
▪ Decision making that considers risk as well as benefits, costs, and possibly
opportunities is known as RIDM
▪ Focus: Alternatives
▪ The RIDM process acknowledges that human judgment has a relevant role in
decisions, and that technical information cannot be the unique basis for
decision-making. This is because of inevitable gaps in the technical information,
and also because decision-making is an intrinsically subjective, value-based
task.
▪ In tackling complex decision-making problems involving multiple, competing
objectives, the cumulative knowledge provided by experienced personnel is
essential for integrating technical and non-technical elements to produce
dependable decisions.
8. RISK-BASED Vs RISK-INFORMED DECISION-MAKING
RIDM PROCESS FOR SUSTAINABILITY 8
• The past two decades have seen an evolution from risk-based to risk-informed
management approaches, in which quantitative outcomes of risk assessment are
only one component of the decision-making process, being combined with other
criteria such as:
o social preferences;
o political concerns; and
o budgetary constraints
• This change in the relationship between risk assessment and decision-making has
been driven by two main factors:
✓ Better awareness that real decisions must integrate multiple concerns, and that
outputs from risk assessment procedures often comprise significant uncertainty,
and thus cannot be used “mechanically” to derive a well founded decision; and
✓ Ongoing debate on the role of technical knowledge and expertise in decision-
making, in which the “technical rationality” of experts is seen by some critics as
disregarding the social context and citizens’ concerns (a “cultural
rationality”) in their analyses.
9. RISK-BASED Vs RISK-INFORMED DECISION-MAKING
RIDM PROCESS FOR SUSTAINABILITY 9
▪ RIDM is a structured process that assists decision-makers when faced with high
impact, complex decisions involving multiple objectives and the presence of
uncertainty.
▪ They aim to ensure that decisions between competing alternatives are taken with an
awareness of the risks associated with each option, and that all attributes of a decision are
considered in an integrated manner.
▪ RIDM is applicable for decisions that typically have one or more of the following
characteristics:
✓ high financial stakes: significant costs and significant potential safety impacts are
involved in the decision;
✓ complexity: the actual ramifications of alternatives are difficult to understand without
detailed analysis;
✓ presence of uncertainty: uncertainty in key inputs creates substantial
uncertainty in the outcome of the decision alternatives and points to risks that
may need to be managed;
✓ multiple objectives: large numbers of objectives require detailed formal analyses;
✓ diversity of stakeholders: high accuracy is needed to define objectives and derive
the corresponding performance measures when the set of stakeholders represents a
wide variety of preferences and perspectives.
10. RISK-BASED Vs RISK-INFORMED DECISION-MAKING
RIDM PROCESS FOR SUSTAINABILITY 10
▪ Throughout the RIDM process, interactions take place between and among
the following actors
✓ the stakeholders (i.e., individuals or organizations that are affected by
the outcome of a decision but are outside the organization doing the
work or making the decision);
✓ the risk analysts (i.e., individuals or organizations that apply
probabilistic methods to the quantification of risks and performances);
✓ the subject matter experts (i.e., individuals or organizations with
expertise in one or more topics within the decision domain of interest);
✓ the Technical Authorities; and
✓ the decision-maker.
13. THE RISK-INFORMED DECISION-MAKING PROCESS
RIDM PROCESS FOR SUSTAINABILITY 13
▪ While most companies realize the need for RIDM, the underlying risk
management process has no real connection to the firm’s strategic
framework or methods of performance measurement;
▪ Instead, it is costly, resource-intensive, compliance-driven, bottom-up
evaluation exercise which often merely results in lists containing
hundreds of risks.
▪ Very important to link strategy, risk and performance considerations.
14. THE RISK-INFORMED DECISION-MAKING PROCESS
RIDM PROCESS FOR SUSTAINABILITY 14
▪ Very important to link strategy, risk and performance considerations.
15. THE RISK-INFORMED DECISION-MAKING PROCESS
RIDM PROCESS FOR SUSTAINABILITY 15
TYPICAL ROADMAP OF LINKAGE EVOLUTIONS WITHIN ORGANISATIONS
16. RIDM AND CORPORATE SUSTAINABILITY
RIDM PROCESS FOR SUSTAINABILITY 16
• Businesses need to fully integrate sustainability and RIDM into their strategy -
not only to minimize potential losses but also to exploit new business
opportunities arising from the sustainability agenda.
• These may include:
✓ new products and services to meet development of sustainability needs;
✓ new technologies to improve sustainability or risk performance; or
✓ new business models to access and develop emerging markets and
support the creation of sustainable communities.
• Corporate sustainability encompasses three dimensions of needs, known as
the “triple bottom line”:
✓ economic prosperity and opportunity;
✓ social equity and quality of life; and
✓ ecological resource preservation.
• Corporate sustainability is an organizational commitment to achieving
competitive advantage through the strategic adoption and development of
ecologically and socially supportive production processes, products and
services and innovative human resource management practices
17. RIDM AND CORPORATE SUSTAINABILITY
RIDM PROCESS FOR SUSTAINABILITY 17
• It is “a business approach that creates long-term shareholder
value by embracing opportunities and managing risks derived
from economic, environmental and social developments”
• Certain risks are inevitable in order to create value through operations
and some risks are indeed precious opportunities if effectively exploited
and managed.
• RIDM provides a contextual framework for businesses serious about
taking on the challenges and opportunities of sustainable development.
• Breakthrough thinking is necessary to incorporate sustainability into
every aspect of RIDM.
• As sustainability develops in the business world, companies can
move from short-term risk-based decisions and regulation
compliance to long-term RIDM development of brand,
competitive, and operational advantage.
18. RIDM AND CORPORATE SUSTAINABILITY
RIDM PROCESS FOR SUSTAINABILITY 18
• Proactive sustainability initiatives are an opportunity for companies to
differentiate themselves as leaders in the industry, the environment, and
society, ensuring long - term business success.
• RIDM can protect, create, and enhance business value through
measurement and management of sustainability threats and
opportunities and also help businesses to effectively respond to the
growing expectations of corporate stakeholders.
• Integrating sustainability considerations into existing corporate systems
and processes within the RIDM framework is the most effective way to
embed sustainability into corporate business rather than creating new
systems and processes.
19. RISK-INFORMED DEVELOPMENT AND ITS CORE AIMS
RIDM PROCESS FOR SUSTAINABILITY 19
• The World Economic Forum (WEF) and Organisation for Economic
Cooperation and Development (OECD) have identified a number of
threats posing ‘the most strategically significant risk [to development] as
a result of:
✓ probability or likelihood; and of
✓ the national significance of their disruptive consequences.
• Threats deemed to pose the most risks include:
✓ global economic and financial instability;
✓ transnational organised crime and terrorism;
✓ severe environmental change including climate and oceanic change
and natural hazards;
✓ cyber fragility and technological disruption;
✓ geopolitical volatility; and
✓ growing antibiotic resistance and pandemics
20. RISK-INFORMED DEVELOPMENT AND ITS CORE AIMS
RIDM PROCESS FOR SUSTAINABILITY 20
▪ These global threats present complex risks and opportunities, and each can
multiply the risks posed by the other.
▪ These threats and complex risk interactions have the potential to undermine
development gains and the achievement of the SDGs unless development
is made risk-informed and acts upon that knowledge.
▪ There are leading and increasing calls by governments, the international
development community and donors for an approach to development that
takes account of multiple threats and complex risks: that is, in other
words, risk-informed.
▪ Risk-informed development (RID) is a decision process that enables
development to become more sustainable and resilient to evolving and
complex threat and risk landscape.
▪ An RID process uses frameworks that help guide assessments of complex
threats and risks, opportunities, uncertainties and options when making a
development decision.
21. RISK-INFORMED DEVELOPMENT AND ITS CORE AIMS
RIDM PROCESS FOR SUSTAINABILITY 21
▪ Most critically, it pushes development decisionmakers to understand and
acknowledge that all development choices involve trade-offs – the creation of
uncertain risks and opportunities.
▪ RID allows the systematic assessment and management of multiple threats to
development objectives, and the trade-offs that will arise from choosing
particular actions, using transparent decision criteria (even if simple).
▪ It presents a clear framework articulating who has responsibility to act upon
what, with what resources, by when, and how those actions are to be
monitored.
▪ RID requires development decision-makers to act on that knowledge in order to
deliver development action that can have multiple benefits and synergies in an
informed and responsible manner.
▪ By integrating risk-based decision-making in development planning and action through
a framework of continuous learning and improvement, RID allows for sustainable
development to become a vehicle to reduce risk, avoid creating risks and build
resilience.
▪ Risk-based development decision-making embodies three core inter-related aims.
23. BENEFITS OF RISK-INFORMED DECISION-MAKING
RIDM PROCESS FOR SUSTAINABILITY 23
▪ Aims at achieving “project” success by risk-informing the selection of decision
alternatives;
▪ Ensures that decisions between competing alternatives are taken with an awareness of
the risks associated with each, thus helping to avoid late design changes, which can be
relevant sources of risk, cost overshoot, schedule delays, and cancellation;
▪ Tackles some of the following issues:
▪ the possible “incongruence” between stakeholder expectations and the resources
required to address the risks to achieve those expectations;
▪ possible misunderstanding of the risk that a decision-maker is accepting when
making commitments to stakeholders;
▪ the miscommunication in considering the respective risks associated with competing
alternatives.
▪ Tries to foster development of a robust technical basis for decision-making by:
▪ coupling the attributes of proposed decision alternatives to the objectives that define
“project” success;
24. BENEFITS OF RISK-INFORMED DECISION-MAKING
RIDM PROCESS FOR SUSTAINABILITY 24
▪ considering all attributes (that are important to the stakeholders) in an
integrated manner;
▪ helping ensure that a broad spectrum of decision alternatives are
considered;
▪ performing quantitative assessment of the advantages and drawbacks
of each decision alternative relative to the identified objectives;
▪ taking into account the uncertainties related to each proposed decision
alternative to quantify their impact on the achievement of the identified
objectives; and
▪ communicating the quantitative assessment of the proposed decision
alternatives into the decision environment, where it is deliberated along
with other considerations to form a comprehensive, risk-informed basis
for alternative selection
25. CONCLUDING REMARKS
RIDM PROCESS FOR SUSTAINABILITY 25
• Developing a sustainable competitive advantage in an increasingly
uncertain environment is arguably the most challenging issue facing
businesses;
• If they are to outmaneuver competitors, organizations need to establish
the structural capabilities that can quickly assess how a changing
operating environment affects the organization's risk appetite and desired
performance level;
• While there clearly are a number of steps that organizations need to take
in order to achieve a state of RIDM, executives should take heart from the
fact that, for the majority of organizations, the building blocks are already
there; and
• Taking a risk-informed development approach allows for sustainable
development to truly become a vehicle to reduce risk, avoid creating risks
and build resilience.