8 - Kuwait Oil Company

Risk ReportingFigure 2 Outlines the process for monitoring and reporting risks within KOC.• Ensure that decisions are madein accordance with ERM policy& guidelines• Report regularly on the keybusiness risks to their superiors• Implement procedures tomanage (terminate, treat, tolerateor transfer) and report on risksin their area of responsibility• Integrate risk management intoevery aspect of normal businessprocesses, for example:• Business planning• Asset management• Project management• Management reporting• Conduct risk management that isproportionate to the level of riskfaced• Assist in the quantification of therisk tolerance by recommendingspecific limitsAll employees and contractorsshould:• Actively apply the ERM processin their daily duties.• Commit and work to delivergood risk managementperformance.• Seek to improve knowledgeand understanding of effectiverisk management principles &practices through continuingpersonal development.ERM is fundamental to achievingKOC’s business aims. By capturingthe risks and applying appropriateactions to reduce its impacts to levelsthat are acceptable to the business,KOC can have confidence in itsprocesses.ERM ProcessERM Process creates a mechanismwithin which exposures can beidentified, risks assessed andmanagement plans developed.In general, the risk managementprocess involves:1. Establishing Context: Thisincludes an understanding ofthe current conditions in whichthe organization operates onan internal, external and riskmanagement context.2. Identifying Risks: Thisincludes the documentationof the material threats to theorganization’s achievement of itsobjectives and the representationof areas that the organizationmay exploit for competitiveadvantage.3. Analyzing/Quantifying Risks:This includes the calibrationand, if possible, creation ofprobability distributions ofoutcomes for each material risk.4. Integrating Risks: Thisincludes the aggregation of38 April-June 2012