Main thing

1. CORPORATE GOVERNANCE
TOPIC: RISK MANAGEMENT
GROUP MEMBERS:
FAIZA ABID SOHAIL (278-2019)

2. RISK
 Risk is the exposure a company or organization has to factor(s) that will lower its profits or
lead it to fail. Anything that threatens a company's ability to achieve its financial goals is
considered a business risk. There are many factors that can converge to create business
risk. Sometimes it is a company's top leadership or management that creates situations
where a business may be exposed to a greater degree of risk

3. RISK MANAGEMENT
 A risk management plan describes how an organization will manage risk. It lays out
elements such as the organization's risk approach, roles and responsibilities of the risk
management teams, resources it will use to manage risk, policies and procedures.
 Risk management refers to the practice of potential risks in advance, analyzing them and
taking precautionary steps to reduce/curb the risk.

4. IMPORTANCE OF RISK MANAGEMENT
 For a business, assessment and management of risks is the best way to prepare
for eventualities that may come in the way of progress and growth. When a
business evaluates its plan for handling potential threats and then it develops
structures to address them, it improves its odds of becoming a successful entity.

5. 5 Risk Management Steps:
 Step 1: Recognize the Risk
 Step 2: Investigate the risk.
 Step 3: Evaluate or Rank the Risk.
 Step 4: Treat the Risk.
 Step 5: Monitor and Review the risk.

6. Example of Risk Management:
Construction Company

7. Common risks include:
 Safety hazards that lead to worker accidents and injuries
 Managing change orders
 Incomplete drawings and poorly defined scope
 Unknown site conditions
 Poorly written contracts
 Unexpected increases in material costs
 Labor shortages
 Damage or theft to equipment and tools
 Natural disasters
 Availability of building materials
 Poor project management

8. Risk Solution:
 Strategy:
 Managing risk at the enterprise level, using indemnity clause in insurance, using risk as a
means to improve profit margin.
 Structure:
 Creating a formal risk department, ensuring insurance protects earnings stream,
preventing over-participation in projects with high risk
 Operations:
 Setting a process to review risks, creating a safety culture and program, manage
subcontractors and vendors, preparing comprehensive documents.

9. How to avoid Risk:
 Transfer the Project Risk
 Mitigate the Project Risk
 Accept the Project Risk

10. Risk management plan in construction
When the risk management team determines how high their risk is on a project, they will
follow the guidelines below:
1. Identify what the problem or problems are or what can happen.
2. Identify who may be harmed or what the impact on the project progress could be.
3. Determine how many risks may arise if the problem occurs.
4. Decide what control measures need to be in place to prevent or solve the problem.
5. Determine if any risks remain.
6. Document all the findings from the risk assessment.
7. Create contingency plans in case the first or second plan does not work.
8. Review and revise everything above as needed throughout the entire project.