Implementation of risk tolerance and risk appetite mechanism into the corporate risk management system

<p>This paper investigates problems of implementation mechanisms accounting risk tolerance and appetite for risk in the corporate risk management system (CRMS), as well as the problem of the organization&#39;s maturity issues in the field of risk management.</p><p>The purpose of this study is to develop recommendations to improve the risk management system of JSC &quot;Gazprom&quot; and the introduction of implementing mechanisms of risk tolerance and risk appetite. To achieve this goal were formulated following tasks:</p><p>In the theoretical part:</p><ol><li>Consideration of approaches to the definition of tolerance, proposed by various organizations;</li><li>Identifying problematic issues pertaining to their implementation;</li><li>Analysis of existing approaches and their features in order to create a single universal approach;</li><li>Selecting a methodological approach to the formation of the CRMS;</li><li>Integration indicators of risk tolerance and appetite for risk in the risk management system of the company.</li></ol><p>In the practical part:</p><ol><li>Comparative analysis of maturity models of risk management in the companies;</li><li>Choosing maturity assessment model of risk management in the company on the basis of the theoretical part of the analysis for future research;</li><li>Carrying out research the maturity level of CRMS and accounting risk tolerance and risk appetite among project organizations;</li><li>Assessing the level of maturity of corporate risk management system of OJSC &quot;Gazprom&quot;;</li><li>Development a complex of measures for improvement corporate risk management system of OJSC &quot;Gazprom&quot;;</li><li>Develop recommendations implementation of KRI as a mechanism for accounting for risk tolerance and appetite for risk in projects.</li></ol><p>Survey was used as the essential method of the research. A survey was conducted among managers on the modified questionnaire BRM3 on the subject of the maturity level of risk management. Based on the research were made ​​the following main conclusions:</p><ul><li>There is a close connection between the level of maturity of the risk management system and the development of accounting mechanisms of risk tolerance and appetite for risk in it.</li><li>Companies, irrespective of the maturity level of risk management using a wide range of risk management tools and their activities are used equally: both qualitative and quantitative risk analysis tools.</li><li>Russian companies have a lower maturity level of risk management than foreign companies, but there is a difference on the most well-developed elements and most underdeveloped elements.</li></ul><p>An important result is the assessment of the maturity level of risk management of OJSC &quot;Gazprom&quot; on which recommendations were made ​​to improve the CRMS.</p><p>Recommendations for improving the of corporate risk management system were developed based on COSO ERM approach and relate to changes in 8 main elements of the corporate risk management system: internal environment, strategic objectives, risk identification, risk assessment, monitoring and controlling risks, reporting and communications, as well as monitoring and controlling of corporate risk management system.</p><p>KRI was proposed as an accounting mechanism of risk tolerance and risk appetite. In the theoretical part were considered the methodological aspects of the composition and development of key risk indicators, and practical - described proposals for the implementation of this instrument in CRMS.</p>