Risk management performance-based

Duty-holder responsibility Participation and commitment Information availability Nonprescriptive and performance-based Risk management system Management systems Living document Auditor/assessor responsibility. 

As diseussed above, expected utility can be reconciled with the two-stage stochastic framework. For example, if one uses the nonlinear coordinate transformation of real value into utility value given by the utility function (Figure 12.3), one can modify the view of the risk curve, as shown in Figure 12.12. If such utility function can be constructed based more on quantitative relations to shareholder value, then one does not need to perform any risk management at all. One could speculate that it suffices to maximize utility value, but only if one has identified the ultimate objective function associated with the company s optimum financial path. It is worth noting that anything less, like the net present value, which can be considered a utility function too, will require the analysis of different curves before a final choice is made. 

Application of these principles throughout the risk management process wUl help ease the tensions and result in high performance in risk management for companies and government organizations (much of the above material is based on Covello et 1988). 

However the latest thinking provided by the United States Food and Drug Administration (FDA) in the Guidance for Industry for Quality Risk Management suggests that all qualification activities for analytical instruments should be performed using a risk-based approach. 

Risk assessment starts with risk identification, a systematic use of available information to identify hazards (i.e., events or other conditions that have the potential to cause harm). Information can be from a variety of sources including stakeholders, historical data, information from the literature, and mathematical or scientific analyses. Risk analysis is then conducted to estimate the degree of risk associated with the identified hazards. This is estimated based on the likelihood of occurrence and resultant severity of harm. In some risk management tools, the ability to detect the hazard may also be considered. If the hazard is readily detectable, this may be considered a factor in the overall risk assessment. Risk evaluation determines if the risk is acceptable based on specified criteria. In a quality system environment, criteria would include impact on the overall performance of the quality system and the quality attributes of the finished product. The value of the risk assessment depends on how robust the data used in the assessment process is judged to be. The risk assessment process should take into account assumptions and reasonable sources of uncertainty. Risk assessment activities should be documented. 

Uncertainty analysis provides an evaluation of the key parameters that contribute to the uncertainty (e.g., variability and imprecision) involved in performing a risk assessment. Also known as probabilistic risk assessment, it provides information that enables decision makers to better understand the strengths, weaknesses, and assumptions inherent in the assessment and to evaluate the conclusions of the risk assessment accordingly. The result of the uncertainty analysis is a distribution of risks that a population may be potentially exposed to and thus, may be used by the risk manager to better understand the implication of the conclusions derived from the risk assessment and to support scientifically based and economically feasible hazardous waste management decisions. 

The performance of systematic risk assessments is a task often taken by federal agencies like US EPA, US FDA, EU EFSA or national institutions. The result of a risk assessment is a starting point for the risk manager, e.g., the ministries, to develop adequate measures, like controls, limits or use restrictions. In the structured approach to the risk analysis the precautionary principle can be particularly relevant to the risk management. It shall be applied in those circumstances where scientific evidence is insufficient or imcertain and when there are indications for concern [95]. In order to prevent a disproportionately intensive use measures based on the precautionary principle should be... 

The two primary industry consensns programs for managing transportation risk are the Responsible Care Distribntion Code of Management Practices and the National Association of Chemical Distribntors Responsible Distribution Process (RDP). These programs share similar elements and are widely used across the chemical distribution supply chain. Responsible Care is a recognized internationally performance-based system that contains the following elements ... 

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