Design and Implementation of Risk Management System: The Case of PT Lanius

DOI

10.2991/aebmr.k.200812.017How to use a DOI?

Keywords

risk management, energy investment, ISO 31000:2018

Abstract

Lanius (pseudonym) is a company that engaged in developing energy resources into investment portfolios requires a proper design for risk management system. It is because of the needs to diversify its business into new business fields as energy investments that entrusted to Lanius. New business fields in the energy sector will certainly face with high risks. In addition, Lanius’s business model that differs from contractor to investor can arise new risks for the company. Coupled with minimal experience makes the potential risk will be even higher. Thus, a comprehensive risk management system is needed as a guide for Lanius in carrying out its business model to achieve the company’s objectives. This study uses ISO 31000: 2018 approach which consists of three circles, namely: principles, frameworks and risk management processes. The advantages of ISO risk management system approach are that it is relatively simple and general so that it can be implemented in various types of organizations. To find out the current implementation of risk management at Lanius, an assessment of the risk maturity level that refers to the Chapman model (2011) was conducted. According to this model, the risk maturity level consists of four levels, namely: initial, basic, standard, and advanced. The assessment was carried out through a questionnaire consisting of 42 questions from five dimensions, namely: culture, systems, experience, training and management. This study’s result is risk management system design that be used in the implementation of risk management at Lanius such as: risk management policy design, proposed organizational structure, SOP and risk management processes templates that include communication and consultancy; determination of the scope, context and criteria, risk assessment, risk evaluation, risk treatment, monitoring and review; recording and reporting. The risk maturity level assessment of Lanius’s risk management implementation shows that currently Lanius is at the basic level. Furthermore, in this study, the risk management system design then implemented. The scope of the risk management process is limited to Lanius and has not been integrated with its subsidiaries. From the process, 128 risks in Lanius have been identified, consisting of 59.4% strategic risks; 32.0% financial risk; 4.7% HR risk; 1.6% reputation risk; 1.6% legal risk; and 0.8% operational risk. In addition, the result of the risk evaluation shows that Lanius has 8% extreme risk. Therefore, a treatment plan has been composed to reduce the level of extreme risk. The risk mapping results show that Lanius has 34% low level risk, 33% medium level, 26% high level, and 8% extreme level. The risk treatment plan needs to be composed to reduce the level of likelihood and / or level of impact of extreme risks. Therefore, after being given treatment, extreme risks that are outside the tolerance limit of Lanius will shift into the risk tolerance limit. Thus, Lanius’s risk profile changed to 33% low level risk, 41% medium level risk and 26% high level risk.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Meazza Putra Kusuma
AU  - Mirra Novyanti
AU  - Aries Heru Prasetyo
PY  - 2020
DA  - 2020/08/13
TI  - Design and Implementation of Risk Management System: The Case of PT Lanius
BT  - Proceedings of the 3rd Asia Pacific Management Research Conference (APMRC 2019)
PB  - Atlantis Press
SP  - 89
EP  - 96
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200812.017
DO  - 10.2991/aebmr.k.200812.017
ID  - Kusuma2020
ER  -