Glossary of
Risk Management Terms

ARM
Associate in Risk Management

Chief Risk Officer (CRO)
Newer title denoting a senior manager with day-to-day oversight of enterprise risk management.

Control
A process effected by our Governing Board, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to risks MCCCD identifies.

COSO
Committee of Sponsoring Organizations of the Treadway Commission

Cost of Risk
The financial impact of an organization from undertaking activities with an uncertain outcome. The cost of managing risks and incurring losses.

Enterprise Risk Management (ERM)

a) An integrated approach to assessing and addressing all risks that threaten achievement of the organization's strategic objectives. The purpose of ERM is to understand, prioritize, and develop action plans to maximize benefits and mitigate top risks. The ERM framework enables management, working without silos, to collaboratively identify, assess, and manage future risks and opportunities individually and across the organization. Also known as holistic, strategic, or integrated risk management.
b) ERM:
· is central to an organization's strategic management
· is focused on identifying and treating risks
· adds maximum sustainable value to all activities
· increases probability of success and minimizes probability of failure
· is continuous; integrated with strategic planning and plan implementation
· integrated with organizational culture and led by senior management
· assigns responsibility throughout the organization; in each job description

IIA
Institute of Internal Auditors

IIA
Insurance Institute of America

Impact
Result or effect of an event. There may be a range of possible impacts associated with an event. The impact of an event can be positive or negative relative to the entity's related objectives.

Inherent Risk
The risk to an entity in the absence of any actions management might take to alter either the risk's likelihood or impact.

Internal Environment
Encompasses the tone of an organization, and sets the basis for how risk is viewed and addressed by an entity, including risk management philosophy and risk appetite, integrity and ethical values, and the environment in which the organization operates.

Liklihood
The possibility that a given event will occur.

Maricopa Integrated Risk Assessment (MIRA)
A new way of looking at risk. A project, committee, and initiative which integrates ERM into MCCCD culture through education and practice. MIRA blends concepts from both traditional risk management and enterprise risk management in to a comprehensive risk management program.

Metrics
Measuring the effectiveness and/or success of risk mitigation strategies.

MIRA Champion
Officer of the organization who takes personal responsibility for the success of the MIRA initiative.

Monitoring
The entirety of risk management is monitored and modifications made as necessary. Monitoring is accomplished through ongoing management activities separate evaluations, or both.

NACUBO
National Association of College and University Business Officers

Opportunity
The possibility that an event will occur and positively affect the achievement of objectives.

PRIMA
Public Risk Management Association

Residual Risk
The remaining risk after management has taken action to alter the risk's likelihood or impact.

RIMS
Risk and Insurance Management Society

Risk

a)The combination of the probability of an event and its consequences. Risk is inherent in all types of undertaking, and may carry the potential for benefit or be a threat to success.
b)The opportunities, uncertainties, threats, or barriers to which MCCCD must respond in order to achieve its objectives.

Risk Acceptance
No action is taken to affect risk likelihood or impact.

Risk Analysis
Identifying, describing and estimating risks, and developing a risk profile.

Risk Appetite
An organization's tolerance for risk. The broad-based amount of risk MCCCD is willing to accept in pursuit of its mission (or vision).

Risk Assessment
Determining the impact of an identified risk on the organization. Risks are assessed on an inherent and residual basis.

Risk Assessment Tools
Instruments designed to assist employees in assessing and evaluating risks when making decisions.

Risk Avoidance
Avoiding the activities giving rise to risk.

Risk Categories

External: Exposure to uncertainty affecting the communities served by MCCCD.
Financial: Exposure to uncertainty regarding the management and control of the finances of the organization.
Hazard: Exposure to loss arising from damage to property or from tortious acts; typically includes the perils covered by insurance.
HR: Exposure to uncertainty related to compliance with personnel policies and procedures, employee morale, and organizational culture.
Legal/Regulatory Compliance: Exposure to uncertainty related to laws, statutes, and administrative regulations that govern how MCCCD operates.
Operational: Exposure to uncertainty related to day-to-day business activities.
Reputational: Exposure to uncertainty related to brand, perceived value, organizational status, and public perception and trust.
Strategic: Exposure to uncertainty related to long-term policy directions of the organization. "Big picture" risks.

Risk Control
A synonym for loss control in traditional risk management. The technique of minimizing the frequency or severity of losses with training, safety, and security measures.

Risk Description
To display the identified risks in a structured format, for example, by using a table.

Risk Estimation
The use of a tool or system (quantitative or qualitative) to determine probability of occurrence and consequences of risks.

Risk Evaluation
Comparing the results of Risk Estimation to established criteria for the purpose of determining the significance of risks and whether to accept them or treat them (see also Risk Mitigation and Avoidance).

Risk Financing
The mechanisms for funding risk mitigation strategies and/or funding the financial consequences of risk (i.e., insurance).

Risk Identification
The qualitative determination of risks that are material; i.e., that potentially can impact he achievement of our objectives.

Risk Management Advisory Committee (RMAC)
A sub-committee of MIRA charged with raising awareness of and expanding traditional risk management initiatives in the MCCCD.

Risk Management Policy
An organization's written statement that sets out its approach to an appetite for risk and its approach to risk management.

Risk Mapping
The visual representation of risks (which have been identified through a risk assessment exercise) in a way that easily allows priority ranking them. This representation often takes the form of a two-dimensional grid with probability on one axis and impact on the other axis. The risks that fall in the high probability/high impact quadrant are given priority risk management attention.

Risk Mitigation
Actions which reduce a risk or its consequences (see Risk Strategies).

Risk Nervous System
Comprehensive system for providing employees with risk-related information, reporting and monitoring.

Risk Portfolio
A list of risks identified and evaluated by an organization (also called Risk Register) that represent our portfolio of risks at a certain time.

Risk Prioritization
The ranking of material risks on an appropriate scale, such as frequency and/or severity (see also Risk Mapping)

Risk Profile
The use of a tool or system to rate and/or prioritize a series of risks.

Risk Reduction
Action is taken to reduce risk likelihood or impact, or both. Measures to reduce the frequency or severity of losses. May include engineering, fire protection, safety inspections, or claims management.

Risk Register
A listing of an organization's risks (also called Risk Portfolio).

Risk Response
Management selects risk responses-avoiding, accepting, reducing or sharing risk-developing a set of actions to align risks with the entity's risk tolerances and risk appetite.

Risk Reporting
Publishing information on risks to internal or external stakeholders.

Risk Sharing
Reducing risk likelihood or impact by transferring or otherwise sharing a portion of the risk.

Risk Strategies (see Risk Mitigation)
Possible responses to risk situations such as: Avoidance, Acceptance, Sharing, Reduction

Risk Tolerance
The acceptable variation relative to the achievement of an objective.

Risk Treatment
The process of selecting and implementing measures to modify the risk.

Silo
Describes divisions, departments or other groups and individuals in organizations that tend to act in isolation.

Tone at the Top (See MIRA Champion)

Traditional Risk Management
Original form of risk management focusing on insurable losses and/or specific functional areas of an organization.

URMIA
University Risk Management and Insurance Association