Managing Risk; Managing Returns

A critical component of risk management is determining the organization’s risk areas and then focusing scarce resources on those exposures.

• Define your risk categories, relative to your organization
• In State Government, the following risk categories are typically used:
  • Operational
  • Legal
  • Financial
  • Reputation
• In the commercial sector, data-intensive models like Black-Scholes or Monte Carlo analysis are often used to quantify risk.

Know your risks. Invest accordingly.