The significance of Systemic Risks

In recent years and in capital project world, the phrase of "systemic risk" has dominated the podiums for debates and speeches, fueled by academic researches, ISO 31000, AACE RP 43R-08 (Parametric Methods) and the new trends in the risk management. It is timely and becomes necessary because the risk landscape has shifted in past decades that new socioeconomic structures have caused radical changes to how capital projects are designed (new technology), procured (globalization) and executed (human behaviors). OECD Report (2003) focused on such emerging systemic risks, calling for the need for a holistic approach to risks in the future.

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T.E.A.M. Approach to Risks

"Deloitte (2007) stated that ""the traditional concept of risk assessment, which relies on the outcome of probability, and the impacts based on schedule and cost is outpaced by the speed at which risks move throughout the project life cycle"".

I agree that to only identify risks that may jeopardize business objectives, and to rank their severity based on two dimensional P x C are not a complete closed-loop risk management process. To instigate the most effective and appropriate risk response strategy and plan, and to take actions and monitor the residual risk levels would ensure the completion of the entire risk management cycle."

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Types of Risk Management

Risk Management (RM) is a very broad term, and it confuses many practitioners and job-seekers when company HR or recruiters post jobs without specifying the types of risk management functions. In a simple term, RM deals with the identification, assessment, quantification and various strategies that help mitigate the adverse effects of risk on the organization or promote the opportunities. When searching for risk management jobs, please beware of different types of risk management functions and industries it applies to. Unfortunately there isn't a single formal training / education that can serve all types of risk functions. In general RM functions may be categorized as follows:

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