What Does Risk Management Mean?
Who does not know that living is risking? Every single decision we make in our lives contains an element of risk. Is it the right thing, at the right time, the right people, the right speed, the right tools?
Risk can be negative or positive. Negative risk means dangers, potential losses, and hazards. Positive risk means opportunities, potential gains and enrichment.
Hence risk itself can not be avoided, if we want to live. What we have to learn in order to survive is to manage risk to our advantage. People who can do this successfully in their personal and business lives become the winners. Those who fail to manage become the losers.

How Do You Manage Risk?
The first step is to understand which risks you are facing. He, who understands what they are facing and can therefore deal with it, is miles ahead of he who walks in the dark and can only react to whatever hits him. Management is all about action, pro-active calculated steps to either avoid the risk or grasp the opportunity. Non-management is all about re-action, post-impact desperate attempts to avoid or grasp. What kind of risks do we face?

Risks can be physical, financial, people, legal, political, environmental, reputation, structural, knowledge or lack thereof, rare or regular, etc. The source of risk is so varied and therefore every person, every business has to make its own evaluation based on particular circumstances. Besides, risks change all the time so a continuous effort must be made to stay up to date.

The second step is to evaluate and analyze each risk. Where does it come from, what are the shape, impact and consequences? When will it occur? Who and what will be impacted? In other words we have to give risk a shape and form.

The third step is to quantify risk. By using mathematical formulas we can calculate the potential negative impact or positive opportunity created. This in turn will allow us to understand which risks are more important than others. Prioritizing is an important management tool.

The fourth step is treatment design. Once we understand the risk we can design methods and steps on dealing with it. What are the most effective ways of either avoiding the risk altogether, minimizing its impact or maximizing its opportunities. Which risks or parts thereof can be handled internally and which ones can be transferred out?

The fifth step is implementation and evaluation and monitor. Putting the ideas of step four into practice is crucial. This will involve people as well as legal, financial, administrative, engineering and many other resources. Once this has been done we can calculate the benefits of risk management versus no-management. Continuous monitoring assures us that the systems put in place continue to do their job under the ever changing circumstances of our lives.

These five steps outline the fundamental steps of any professional risks management process. The ARETE group is committed to execute each one of these steps in close cooperation with our clients and in coordination of what has already been accomplished.

Who Should Practice Risk Management?
Any business committed to controlling its future. Profitability is the main objective of any business. Knowing and being able to handle what could jeopardize or enhance this profitability is a main management responsibility. Therefore every one of us must practice Risk Management in one way or another.

Why Use Outside Expertise?
The fact is that Risk Management is a very complex science, which continues to evolve due to the ever changing business climate. Properly applied it can be extremely profitable. In-properly applied it can be very expensive. Most companies do not have the in house expertise, resources, knowledge and experience to deal with all of the steps in a professional way.
Importing outside expertise to fill the gaps is a well established management tool in many business areas.

The ARTETE Group is committed to working in the most cost-effective manner with your people in order to bring your business up to international standards in this important business practice.

Risk Management Links

http://www.rims.org/
http://riskinstitute.ch/homepage/main.htm
www.irmi.com
www.rmahq.org
www.rmf.harvard.edu
www.treasuryandrisk.com
www.riskreports.com
www.medrisk.com/
www.urmia.org/
www.contingencyanalysis.com
www.agrisk.umn.edu
www.airm.org.au
www.sys.virginia.edu/risk/

It is far from possible to be complete here since there is a very extensive library of information and research available on the internet. We only try to give a taste of what is available and some of the location to start.

PT. Usaha Tepat Guna, Risk Management Consultants

If you want to know more about PT. Usaha Tepat Guna, of which Mr. Michael Sinjorgo CLU, CHFC, ACI arb is the President Director we invite to open the link below by clicking on the box.

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