RISK MANAGEMENT

• Risk management


  A process in which businesses identify, assess and treat risks that could potentially affect their business operations
• Risk


  An event or circumstance that has a negative effect on your business
• Common business risk categories

  • Strategic
  • Compliance
  • Financial
  • Operational
  • Environmental
  • Reputational
  • Health and safety
  • Project
  • Equipment
  • Security
  • Technology
  • Stakeholder management
  • Service delivery
• Preparing a risk management plan

  1. Identify the risk

  2. Assess the risk

  3. Manage the risk

  4. Monitor and review
• Identify the risk


  Undertake a review of your business to identify potential risks
• Assess the risk


  Establish the likelihood (frequency) of it occurring and the consequence (impact) if it occurred
• Level of risk

  Likelihood x consequence
• Manage the risk

  • Avoid the risk
  • Reduce the risk
  • Transfer the risk
  • Accept the risk
• Monitor and review


  Regularly monitor and review your risk management plan and ensure the control measures and insurance cover is adequate
• Avoid the risk


  Change your business process, equipment or material to achieve a similar outcome but with less risk
• Reduce the risk


  If a risk can't be avoided, reduce its likelihood and consequence. This could include staff training, documenting procedures and policies, complying with legislation, maintaining equipment, practicing emergency procedures, keeping records safely secured and contingency planning
• Transfer the risk


  Transfer some or all of the risk to another party through contracting, insurance, partnerships or joint ventures
• Accept the risk


  This may be your only option
• Common business risk categories

  • Strategic
  • Compliance
  • Financial
  • Operational
  • Environmental
  • Reputational
• Strategic risk


  Decisions concerning your business objectives
• Compliance risk


  The need to comply with laws, regulations, standards and codes of practice
• Financial risk


  Financial transactions, systems and structure of your business
• Operational risk


  Your operational and administrative procedures
• Environmental risk


  External events that the business has little control over such unfavourable weather or economic conditions
• Reputational risk


  The character or goodwill of the business
• Other business risk categories

  • Health and safety
  • Project
  • Equipment
  • Security
  • Technology
  • Stakeholder management
  • Service delivery