Risk Management Policy

1. Purpose

The purpose of this Risk Management Policy is to establish a framework for identifying, assessing, managing, and monitoring risks that could potentially affect the achievement of the organization’s objectives. This policy aims to ensure that risk management practices are integrated into the organization’s strategic planning and decision-making processes.

2. Scope

This policy applies to all HMM employees, contractors, and stakeholders involved in the organization’s operations, including projects, programs, and activities. It covers all types of risks, including strategic, operational, financial, compliance, reputational, and environmental risks.

3. Definitions

• Risk: The effect of uncertainty on objectives, which can be either positive (opportunity) or negative (threat).
• Risk Management: The process of identifying, assessing, evaluating, mitigating, and monitoring risks to reduce their impact on the organization.
• Risk Appetite: The level of risk that the organization is willing to accept in pursuit of its objectives.
• Risk Assessment: The process of identifying risks and analyzing their potential impact and likelihood.

4. Risk Management Objectives

• To protect the organization’s assets and reputation by minimizing potential risks.
• To promote a proactive and consistent approach to risk management across all levels of the organization.
• To support informed decision-making by ensuring risks are appropriately identified, assessed, and managed.
• To ensure compliance with legal, regulatory, and contractual obligations.

5. Risk Management Principles

• Integration: Risk management should be an integral part of all organizational processes, including strategic planning, project management, and operations.
• Structured and Comprehensive: The risk management process should be systematic, structured, and comprehensive to ensure consistent and comparable results.
• Customization: The risk management approach should be customized to fit the organization's external and internal context and risk profile.
• Inclusiveness: Risk management should involve stakeholders to provide a more accurate understanding of risks and foster ownership and accountability.
• Dynamic and Responsive: Risk management should be dynamic, iterative, and responsive to change.

6. Risk Management Process

1. Risk Identification: Identify potential risks that could impact the organization’s objectives. This includes brainstorming sessions, risk workshops, and consultation with stakeholders.
2. Risk Assessment: Assess the likelihood and impact of each identified risk. This includes qualitative and quantitative analysis to prioritize risks based on their severity.
3. Risk Evaluation: Compare the level of each risk against the organization’s risk appetite and determine whether the risk is acceptable or requires further treatment.
4. Risk Mitigation: Develop and implement strategies to mitigate identified risks. Strategies may include risk avoidance, reduction, transfer, or acceptance.
5. Risk Monitoring and Review: Continuously monitor and review risks, risk management processes, and the effectiveness of risk mitigation strategies. Update the risk register and report on risk management activities to relevant stakeholders.

7. Roles and Responsibilities

• Board of Directors: Provide oversight and ensure that an effective risk management framework is in place. Review and approve the organization’s risk appetite and risk management policy.
• Senior Management: Lead the implementation of the risk management policy and ensure that risk management processes are embedded in the organization’s operations. Report on risk management activities to the Board of Directors.
• Risk Management Committee: Oversee the risk management process, review risk assessments, and provide recommendations to senior management and the Board of Directors.
• Risk Owners: Identify, assess, and manage risks within their areas of responsibility. Ensure that risks are documented in the risk register and regularly reviewed.
• All Employees: Understand and comply with the risk management policy. Report any identified risks to their supervisors or designated risk owners.

8. Risk Appetite and Tolerance

The organization’s risk appetite defines the amount and type of risk that the organization is willing to pursue or retain. Risk tolerance levels will be established to guide decision-making and risk management activities.

9. Reporting and Communication

Regular risk reports will be prepared and communicated to the Board of Directors, senior management, and relevant stakeholders. This includes updates on the status of key risks, risk mitigation activities, and any changes to the organization’s risk profile.

10. Training and Awareness

The organization will provide regular training and awareness programs on risk management principles, processes, and practices to all employees and stakeholders to foster a culture of risk awareness and accountability.

11. Policy Review and Revision

This Risk Management Policy will be reviewed annually or more frequently if necessary to ensure its relevance and effectiveness. Any revisions to the policy will be approved by the Board of Directors.

12. Acknowledgment

All HMM employees, contractors, and stakeholders are required to acknowledge that they have read, understood, and agreed to abide by this Risk Management Policy.