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SM-075 Glossary
BM II Obj 3.01 Key Terms
Term | Definition |
---|---|
acceptance | a risk response strategy that involves accepting a risk's consequences because the potential payoff is higher than the losses; also known as risk retention or assumption |
audit report | a document that describes the accuracy and appropriateness of a businesses information, processes, and/or systems. |
avoidance | a risk response strategy that involves choosing not to do something that is considered risky. |
Brand Erosion | the deterioration or destruction of a corporate or product brand |
chief risk officer | an executive responsible for a business's risk-management activities , which include the planning, controlling, preventing, and limiting of business losses and enhancing possibilities for gain. |
contingency plan | specific guidelines and activities used when responding to undesirable circumstances; an alternative course of action |
credit downgrade | the reduction of a business's credit rating or measure of relative credit risk; usually accompanied by an increase in expenses and a decrease in creditworthiness |
environmental scan | a three-step process in which businesses gather information about their surroundings, analyze that information and determine the future impact of that information |
exchange rate | the price or value at which one currency can be converted to another |
fallback plan | guidelines explaining what to do and how to recover if the contingency plan fails |
financial risks | possible events and situations that directly impact a company's cash flow |
hazard risks | potential events and situations that can cause injury or harm to people, property, or the environment |
impact | the effect or influence of an event |
incident log | a record of accidents, injuries, and other mishaps occurring at a particular business or a certain department |
mitigation | a risk response strategy that involves reducing or controlling the impact of a risk if it occurs |
operational risks | possible events and situations resulting from employee actions, core processes ad daily business activities. |
proactive | adapting to the environment in the advance of the occurrence of events, taking advantage of opportunities rather than reacting to problems |
probability | the likelihood that an event will occur |
prospective risks | risks that have not happened before but could in the future |
pure risk | a risk that carries the possibility of loss or no loss |
reactive | hesitant to take action; passive; waiting for changed to occur before acting |
retroactive risks | risks that have previously occurred |
risk | the possibility of loss(failure) or gain(success) |
risk-averse | avoiding the risk whenever possible |
risk checklist | a standardized list of risks that a business faces on a regular basis; used to speed up the risk-identification process |
risk identification | a risk-management process that involves recognizing risks that could impact a business's objectives and activities |
risk impact/probability chart | a framework used to determine the severity of risks if they occur, used by risk managers to prioritize risks |
risk management | a business activity that involves the planning, controlling, preventing, and limiting of business losses and enhancing possibilities for gain |
risk measurement | a risk-management process that involves determining the potential severity of different risks |
risk monitoring and control | a risk-management process that involves determining the effectiveness of current risk-response strategies and tools, tracking existing risks, monitoring new risks, and developing responses and workarounds for previously unidentified risks |
risk register | a record or listing of risks that could potentially impact a business or project |
risk response | a risk-management process that involves selecting the most effective ways to handle different risks |
risk-seeking | looking for ways to turn risk into a strategic advantage and/or capital |
risk-tolerant | accepting risk when necessary, but not seeking risk |
speculative risk | a risk that may result in loss, no change, or gain |
strategic risks | possible events and situations that can affect the execution of an organizations long-term plans |
transference | a risk response strategy that involves moving the impact of a risk to someone or something else |