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BM II 3.01
Risk Managment
| 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 business's information, processes, or systems. |
| Avoidance | A risk-response strategy that involves choosing not to do something considered risky |
| Brand Erosion | The deterioration or destruction of a corporate or product brand |
| Chief Risk Officer (CRO) | 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 on their surroundings, analyze that information, and determine its future impact |
| 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 a contingency plan falls |
| 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 in 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 or situations that are the result of employee actions, core processes, and daily business activities |
| proactive: | Adapting to the environment in advance of the occurrence of events; taking advantage of opportunities rather than reacting to problems |
| probability: | The likelihood an event will occur |
| Prospective risks: | Risks that have not happened before but could occur in the future |
| Pure risk: | A risk that carries the possibility of loss or no loss |
| Reactive | Hesitant to take action; passive; waiting for changes to occur before acting |
| Retroactive risks: | Risks that have previously occurred |
| risk: | The possibility of loss (failure) or gain (success) |
| Risk-averse: | Avoiding 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 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 organization's long-term plans |
| transference: | A risk-response strategy that involves moving the impact of a risk to someone or something else |
Created by:
Fernando646
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