RSK4801
Assignment 4
(COMPLETE
ANSWERS) 2024 -
DUE 4 October 2024
, RSK4801 Assignment 4 (COMPLETE ANSWERS) 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
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, 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
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