Risk action plan
What is a Risk action plan?
A risk action plan is the course of action which an organisation agrees upon to help them to address potential risks, reduce the likelihood of these risks occurring and to lessen the impact of these risks if they do occur. A plan is created to ensure that the right actions are carried out in a timely manner. A plan also provides a go-to guide, in case the “unexpected” happens.
What is a Risk action plan like?
A risk action plan is like a plan for a camping trip. If you are going to go out into the wild, you need to make sure that you take a sturdy tent to protect you from the weather, extra food in case you are out for longer than you expect, a spare set of clothes, in case it rains and a penknife in case you need some tools. You should also always take a map and a compass, amongst other things. It would be silly to set off on an adventure without making a proper plan and collecting all of these things to help you to prepare for what is ahead. A risk action plan prepares you to set off on a business adventure by helping you to put some contingency strategies in to place.
What is the purpose of a Risk action plan?
A risk action plan helps to prepare you to face potential risks which may occur as part of a business scenario and helps you to tackle any problems with may occur. A risk action plan will provide you with strategies which are appropriate dependent on the levels of risk which your organisation faces.
What are the different types of Risk action plans?
Risk Avoidance Plans – These plans include measures which aim to completely avoid the risks in question by preventing them from happening.
Risk Reduction Plans – These plans include measures which reduce the likelihood of a risk occurring or reduce the effects of a risk if it does occur.
What’s involved with developing a Risk action plan?
In order to develop an appropriate risk action plan, risks must first be identified and evaluated. When developing a plan, an organisation must consider the probability of a risk occurring, and the potential costs to the company if that risk does occur. When developing a risk action plan, those involved with creating the strategies must carefully consider whether the costs incurred in preventing the risk from occurring would be less than the costs incurred if it did occur. If the cost of prevention is higher, then the organization may want to take their chances.
Where does a Risk action plan fit into the risk management process?
Creating a risk action plan comes at the middle of the risk management process, between evaluation of risks and before the monitoring process.
How does a Risk action plan impact on managing organisational risk?
A risk management plan will identify measures which should be taken across the whole organisational structure to try to reduce risk. If the measures are followed correctly, they should have a very positive impact on the reduction of risk.
What terms are used in a Risk action plan?
Risk – A problem which may or may not occur.
Plan – The steps which should be taken to reduce or remove the risk.
Reduce – A step which is taken to decrease the likelihood of a risk occurring, or to lessen the costs to an organisation if that risk does ultimately occur.
Remove – A step which is taken to prevent the risk from occurring.
Where can I find more information about a Risk action plan?