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RSK4801 Assignment 4 2024 - DUE 4 October 2024
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RSK4801Assignment 4 2024
- DUE 4 October
2024
QUESTIONS WITH COMPLETE ANSWERS
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,RSK4801 Assignment 4 2024 - DUE 4 October 2024
Since 2020, many incidents and events have caused organisations to adopt a focused approach
towards risk management and the role of risk managers. Examples of these events are the
COVID-19 pandemic and its severe effects on many countries, economies, and businesses. South
Africa was not excluded from the pandemic and was further hampered by severe power
interruptions and inadequate service delivery. These are all risk-related incidents/events
involving risk managers to assist in the management thereof. According to an article in
Enterprise Risk Magazine (2023), uncertainty also boosted the profile and role of risk managers.
Large-scale risks are happening more often, which requires sound risk management to cope with
the increasingly unclear business and physical environments. As such, it seems imperative that
the role of risk managers and appropriate risk management tools is clear. The classic three lines
of defence in the risk governance model endeavour to demarcate the various roles regarding the
management of risks. Although there are many issues surrounding this model, it provides a
foundational guideline for the roles of the main role-players in risk management. Regarding the
tools for operational risk management, it seems that there are concerns over the predictive
powers of key risk indicators (KRIs), the value of risk and control self-assessments (RCSAs),
and the subjectivity of scenario analysis to manage operational risks (Enterprise Risk Magazine,
2023). In addition, embedding an operational risk management framework is becoming essential.
However, it appears that there is only a vague understanding of the exact role of a risk manager.
Furthermore, according to Enterprise Risk Magazine (2023), excessive effort is being expended
on issues that generate too little value when using operational risk management tools. For
example, RCSAs are tools that should provide value to organisations by identifying the primary
, inherent risks, which can be used for analysing risk scenarios and determining and managing
KRIs. In addition, RCSAs can determine control weaknesses in managing the residual risks
effectively. Enterprise Risk Magazine (2023) mentioned that organisations should focus their
RCSA efforts on the effectiveness and adequacy of controls in mitigating low-, medium-
frequency/medium and high-impact operational risks. Risks leading to high-frequency and low-
impact operational loss incidents should be managed by means of more real-time monitoring of
KRIs. This could ensure obtaining value from the RCSA activity. According to the Institute of
Risk Management (IRM, 2023), the year 2024 will see certain risk events escalate, requiring a
more “aggressive” and formal approach by risk managers to assist organisations in coping with
these risk events. Some of these risks, specifically for South Africa, were identified by various
risk managers as follows:
• future disasters, such as ongoing floods, global warming, and drought
• the constant negative influence of the energy crisis on the economy
• the slow pace of sustainability and investment projects
• poor maintenance and development of infrastructure
• increasing cyber risks and cybercrimes
• inadequate handling of fraud and corruption General comments on the above points seem to
indicate a lack of effective business continuity processes and disaster management to manage
future disasters. This is true of both the public and private sectors. Fraud and corruption are
creating a negative view of the country, causing investors to be unwilling to invest in a
deteriorating economy. This, in turn, leads to unemployment, poverty and social inequalities.
Technology also needs to be insourced because of a lack of adequate expertise, which makes the
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