Building a comprehensive and holistic risk management system allows an organization to anticipate and understand the full range of risks it faces throughout its departments and business units. This holistic approach to risk management enables the organization to determine its risk appetite, proactively identify risks worth taking and ones that should be avoided, and build an effective control system that leads to greater business resilience and better performance. To be effective, the risk management framework should be linked to the organizational strategy by defining the organization’s risk appetite, i.e., the level of risks that the organization is willing to tolerate to achieve its strategic objectives. The most challenging task is determining which risks fall within the organization’s risk appetite and which ones should be mitigated, hedged i.e., translated to another party, or avoided altogether.

As regulatory compliance requirements have expanded during the past two decades, scrutiny of corporate risk management practices has also increased. This makes risk identification, measurement, analysis, internal audits, and other risk management features a significant component of business strategy. The two most widely recognized risk management frameworks are COSO and ISO 31000. The COSO ERM Framework, launched in 2004 and updated in 2017, addresses the growing complexity of Enterprise Risk Management (ERM). It defines critical principles and concepts for ERM that provide clear guidance and direction for managing risk. The framework includes 20 principles that are organized into the following five interrelated components:

The ISO 31000, released in 2009 and revised in 2018, provides ERM principles that guide organizations to correctly identify, evaluate, prioritize, and mitigate risk exposures. The ISO 31000 standard provides the best-known sources for risk management guidelines, developed by the International Organization for Standardization (ISO). ISO’s five-step risk management process can be summarized as follows:

JAFAN team works closely with our clients to develop a comprehensive and holistic risk management framework that helps them identify, quantify, and manage risks that affect their organizations. JAFAN risk management framework will help your company easily identify, measure, prioritize, and mitigate key risk factors. 

Our risk management advisory team helps our clients in both public and private sectors design and implement a tailored made, data-driven full range of assurance and advisory services, such as internal control quality and effectiveness, internal audit system, and risk management and governance frameworks. Our risk management advisory services include, but are not limited to, the following areas: