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RSK4801 Assignment 4 2024 - DUE 4 October 2024
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RSK4801 ASSIGNMENT 42024 - DUE 4 OCTOBER
2024
[Company address]
,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
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