How to measure risk management

Posted on 14.06.2018 by Monique
LGE is a measurement of the financial harm from an event. Risk professionals today are facing an unprecedented level of scrutiny. We need to break risk into distinct parts that are measurable.

This article explains how to define and classify legal risk so that organizations can develop an effective risk management strategy.

The informal notion of risk as the chance that something bad might happen is not a bad place to start defining risk. Youll learn exactly how to do that in this tutorial. Its a question you could ask yourself when implementing risk management in your organisation. Risk managers are not only responsible for protecting and securing their organizations, they also have to provide evidence that their risk management programs are actually effective at managing risk. Better management requires a better definition though.
Risk management can be a very complex area, with very detailed methodologies and formulas for calculating risk. In this case R stands for risk, p for Probability of Event expressed as a percentage, and LGE stands for Loss Given Event. Easy questions to ask, never easy to answer. If you can answer these questions, youll know what youll have to measure. How do you measure your risk management performance. The most important characteristics of both KRIs and KPIs is that they are measurable, comparable, and reportable.