International models of risk management: A potential for use and the results
Importance The negative event can be avoided and its effect can be cushioned, if the effective corporate system for risk management is built on the basis of generally accepted international principles. Therefore, it is necessary to analyze the existing global practices for their adaptation and application in Russia. Objectives The research analyzes global risk management models and identifies how legal entities of the Russian Federation can apply them. Methods Using a comparative analysis, we examined two international models of risk management, i.e. those of COSO and FERMA. Results We identified classes of risks and built the risk management model on the basis of the FERMA risk classification model. The article proposes special concepts of risk management by combining the conceptual framework of the COSO and FERMA models. We devised a risk management model that any legal entity can use. Classes of risks are visualized for more convenience. The article also presents a FERMA model-based form to describe risks, and the map of risks that allows illustrating how the risk concentrate by the tolerance level. Conclusions and Relevance Corporate risk management does not duplicate the existing management systems, but rather supplements them. Entities can use the data and model presented in the article to build the risk management system. The effective risk management helps to restrain risks and their impact in corporate operations, thus streamlining the development and avoiding negative events.