I would like to share Insight #65 from my book “The Dangerous Book for CEOs” with you.
Establish the context. Understand the nature of the business, the risks inherent in the business, and your priorities. Identify the risks. Define the various types of risk. For example, the strategic risks to your goals and objectives. Analyse the risks. How likely is the risk event to happen in terms of probability and frequency? What would be the impact, cost, or consequence of that event occurring? Evaluate the risks. Rank the risks in order of importance. Treat the risks. Develop and implement a plan with specific counter-measures to address the identified risks.