26/01/2008 | Knock out Risk

Risk management is raised typically when an audit occurs, at insurance renewal, when addressing a funding agreement, when planning the future or when a damaging event occurs. Large and small organisations respond with a structured approach to risk management. This increases their likelihood of business success. Why manage risk? This activity increases client confidence, builds viability, reduces unnecessary costs (injury, bad publicity, lost funding, legal costs, loss of key staff), complies with legislation, fulfils funding agency requirements and attracts partners. In our experience many smaller organisations are in a precarious position, as they: · Deal with risks only as they arise · Expect their manager to address all risks · Think their risks are only financial or safety related · Believe a good history predicts a good future Consider this list of risks. How many apply to your organisation? How many are being managed effectively? Do you report on the management of risks, and to whom? · Asset management · Client behaviour · Ethical practice - Board & contractors · Contractor performance standards · Insurance · Information confidentiality and security · Accreditation ·   Media and publicity ·   Significant changes in client expectation · Sector standards ·   Finances and budget · Purchasing of goods and services · Partnerships and alliances · Volunteer management · OHS&W of clients, Board members, etc. ·   Loss of Government funding · Competition (friendly and unfriendly) · Fundraising downturn · Recruitment ·   Succession planning, including Board Where do we start? There are many risks in every organisational action, or lack of action. To get started all organisations should define their major risks and focus on these as distinct from minor risks. Major risks usually feature: ¨ High risk of personal injury ¨ Existing controls clearly inadequate ¨ Significant loss of information equipment, staff, partners or clients ¨ Funding at risk ¨ Business / Program interruption greater than 3 days ¨ Insurance cover unobtainable or costly ¨ Bad publicity - media or market ¨ Damaged competitive position Smaller organisations often have only 8-10 major risks. Australian Standard AS 4360 (2004) should be used to manage all risks, with priority given to major risks. It is crucial that the Board of each community organisation asks for a written Manager’s report on risk management - at least annually. The Board is the employer, not the Manager, and therefore is also accountable for the overall performance of the organisation to its clients. Organisations use simple risk management tools to record risks, define existing treatments, analyse risks, assign responsibility, set priorities, and report on actions taken: · Risk Management Policy · Risk Register · Risk Analysis Grid (AS 4360) · Risk Management Plan (written) The CBB has experienced and qualified consultants who can simplify risk management and ensure your organisation manages it effectively. Keith Furniss - CBB Manager, Consulting Back to news archive