IOR launches first sound practice guidance in series

Last Updated on Wednesday, 19 May 2010 17:52 Written by Steve Radford Friday, 15 January 2010 00:00

Press release 15th January 2010

The Institute of Operational Risk (IOR) has launched ‘Risk Appetite’ – the first in a new series of guidance papers designed to provide sound practice guidance on how a company may wish to deliver a particular risk management technique.

The emphasis of the IOR’s guidance papers is to provide information on the practicalities and know-how necessary in order to implement the techniques that support a robust risk management framework. To date much guidance in this field has focused on what a company should do in a theoretical way with little by the way of practical advice.

Divided into three sections, the Risk Appetite guidance paper outlines a variety of good practices from which may be drawn a collection of appropriate, relevant and proportional ideas, considers the process for setting risk appetite and provides guidance on implementation and the practical application.

Developing risk appetite statements for operational risk is notoriously difficult as the risks are often dependent on human behaviour. This first sound practice guidance paper highlights the benefits that developing risk appetite offers; in particular in understanding where opportunities exist as well as in communicating how much risk is acceptable on particular activities.

Risk appetite also enables management to monitor how much risk is being taken on board and can also assist in demonstrating compliance with regulatory requirements where necessary.

Philip Martin the IOR Chairman says:

“It’s essential that operational risk is recognised as a strategic driver for businesses. That means demonstrating its value to a management board in a practical rather than a theoretical manner. This series of guides are therefore styled to empower operational risk professionals to do just that. These guidance papers are being developed by IOR members who are practicing risk professionals and they bring real experience of good practice and also the challenges around developing operational risk frameworks. It is this that we are trying to capture in the series.

“We want to build on the range of benefits that the IOR members receive and this series of guidance papers that will be introduced throughout the year is an exciting innovation. It will also help our members to maintain their competence, demonstrate their professionalism and raise the profile of this important discipline. The Guidance papers are available to anyone and can be found on the Institute’s website.”

A second guidance paper on ‘Risk Control Self Assessment’ is in the final stages of production and will be published shortly with further papers scheduled for the rest of the year.

Ends;

For further information contact Philip Martin, Chairman the Institute of Operational Risk telephone: 07747 837538, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or Richard Baker who is leading this work, telephone: 07799 656 425, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Issued on behalf of the IOR by Cauldron Consulting, contact Steve Radford telephone 020 3178 7238 (office), 07889 903786 (mobile), email This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Link to Sound Practice Guidance - Part 1 - Risk Appetite

Notes for editors

The Institute of Operational Risk

Established in January 2004, the Institute of Operational Risk is an organisation that has as its primary aim the promotion of skills and standards associated with Operational Risk Management. It is an independent, not for profit, professional body designed to support its members through the provision of:

High standards - against which membership and professional competency is judged
External events - for the promotion of ideas, ongoing professional development and networking
Research - to assist the above and ensure the continual improvement of methods, techniques and knowledge
A Knowledge Centre – the development of a robust and informative knowledge centre for operational risk management
Sound Practice Guidance – the development of a series of Sound Practice Guidance papers providing the know-how for a variety of risk management practices

Membership currently stands at over 200 individuals from the UK, Europe, Middle East, Nigeria, South Africa, Hong Kong, Australia and New Zealand

www.ior-institute.org

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