How to audit risk management?

Most risk managers think they are doing a great job. But how can you actually tell? To add to the challenge, despite the guidance provided in ISO 31000:2009, the concept of risk management effectiveness still remains a bit vague.

Who can audit or validate your risk management effort to say whether it’s good or not? I mean there are internal and external auditors, but they often look at all the wrong things and ask useless questions about risk appetite, policies, frameworks, risk owners, mitigation plans and risk profiles. All of this has nothing to do with the true effective risk management.

Learn how to use decision-making tools to analyze risks and improve risk management effectiveness in non-financial companies in Risk Academy's free webinar.

🎥 The speaker's publications, articles, and videos contain interesting, provocative, and unusual ideas that can challenge traditional perspectives on risk management.
🤔 Risk management is not about managing risks, but about integrating risk analysis into decision-making and core business processes.
💡 Intuitive decision-making is the worst approach in business, highlighting the importance of integrating risk management into the decision-making process.
🤔 The effectiveness of risk management in an organization can be assessed by examining how decisions are made, whether they are based on appropriate risk analysis or intuition and incomplete data.
📝 When evaluating decisions, it is important to consider how well the requirements are documented and carried out in reality, starting from strategic planning and going through budgeting, operational planning, maintenance, and marketing.
🧠 "You really need to have a good appreciation for cognitive biases in risk management."
🤔 The effectiveness of risk management heavily relies on the knowledge and understanding of risk practitioners, auditors, and consultants, as well as their ability to assess risk perception and cognitive biases in decision-making.
🤔 The role of the risk manager will fundamentally change as risk management becomes more focused on decision-making rather than traditional tasks like risk assessments and workshops.
💼 Integrating risk management into investment decision-making requires a deep understanding of corporate finance, statistics, and modeling.


00:00 - Vote on which document will provide the most insight into risk management effectiveness in non-financial companies in Risk Academy's webinar.
05:36 - Risk management is about integrating risk analysis into decision-making and core business processes, tailored to fit the organization.
10:23 - Assess risk management effectiveness by looking at formalized risk consideration and decision-making based on transparent and timely risk analysis.
19:24 - Decision-making should be strategic, documented, and assessed for risk-based culture.
23:28 - Join the free webinar to learn how to use decision-making tools to analyze risks and improve risk management effectiveness.
28:34 - Risk management can save companies money and improve credit ratings by providing value through risk analysis, cash flow reporting, and risk adjusted margin calculations.
35:15 - Integrating risk management into decision-making is difficult, so it's important to assess the risk management team to identify potential problems.
41:09 - Download the free book to learn about investment decision-making, corporate finance, and statistical and modeling skills at the upcoming G3 1000 conference in Dubai.

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