N National ational Organisational Organisational

Development Network Development Network

Risk Management process
Risk Management is a fve step process:
Step 1 Establish the context
Step 2 Identif the risks
Step ! "nalse the risks
Step # Eval$ate the risks
Step % &reat the risks
&hro$gho$t each step it is essential that there is cons$ltation and comm$nication
'ith everone in o$r organisation(s f$nctions) activities and events *refer to
diagram+,
Step 1 Establish the context
-efore risk can be clearl $nderstood and dealt 'ith) it is important to $nderstand
the context in 'hich it exists, .o$ sho$ld defne the relationship bet'een o$r
cl$b and the environment that it operates in so that the bo$ndaries for dealing
'ith risk are clear,
Establish the content b considering:
&he strategic context the environment 'ithin 'hich the organisation
operates
&he organisational context the ob/ectives) core activities and operation(s
of the cl$b,
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Step 2 Ienti!" the risks
&he p$rpose of this step is to identif 'hat co$ld go 'rong *likelihood+ and 'hat is
the conse0$ence *loss or damage+ of it occ$rring,
1e 0$estions to ask incl$de:
2hat can happen3 4ist risks) incidents or accidents that might happen b
sstematicall 'orking thro$gh each competition) activit or stage of o$r
event to identif 'hat might happen at each stage,
5o' and 'h it can happen3 4ist the possible ca$ses and scenarios or
description of the risk) incident or accident,
2hat is the likelihood of them happening3
2hat 'ill be the conse0$ences if the do happen3
Risks can be phsical) fnancial) ethical or legal,
6hsical risks are those involving personal in/$ries) environmental and 'eather
conditions and the phsical assets of the organisation s$ch as propert) b$ildings)
e0$ipment) vehicles) stock and gro$nds,
7inancial risks are those that involve the assets of the organisation and incl$de
theft) fra$d) loans) license fees) attendances) membership fees) ins$rance costs)
lease paments) pa8o$t of damages claims or penalties and fnes b the
government,
Ethical risks involve act$al or potential harm to the rep$tation or beliefs of o$r
cl$b) 'hile legal risks consist of responsibilities imposed on providers) participants
and cons$mers arising from la's made b federal) state and local government
a$thorities,
Step # $nal"se the risks %& eval'ate(
&his involves analsing the likelihood and conse0$ences of each identifed risk
and deciding 'hich risk factors 'ill potentiall have the greatest e9ect and
sho$ld) therefore) receive priorit 'ith regard to ho' the 'ill be managed, &he
level of risk is analsed b combining estimates of likelihood *table 1+ and
conse0$ences *table 2+) to determine the priorit level of the risk *table !+,
It is important to consider the conse0$ences and the likelihood of risk in the
context of the activit) the nat$re of o$r cl$b and an other factors that ma
alter the conse0$ences of likelihood of risk,
Risk eval$ation involves comparing the level of risk fo$nd d$ring the analsis
process 'ith previo$sl established risk criteria) and deciding 'hether risks can
be accepted, If the risk falls into the lo' or acceptable categories) the ma be
accepted 'ith minimal f$rther treatment, &hese risks sho$ld be monitored and
periodicall revie'ed to ens$re the remain acceptable, If risks do not fall into the
lo' or acceptable categor) the sho$ld be treated $sing one or more of the
treatment options considered in step #,
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&he criteria for eval$ating the risks at o$r cl$b are sho'n belo':
)able 1 *ikelihoo scale
:$estion 'hat is the likelihood of the risk event occ$rring3
Rating
*I+E*I,OOD
&he potential for problems to occ$r in a ear
- $*MOS) .ER)$IN/ 'ill probabl occ$r) co$ld occ$r several times
per ear
0 *I+E*1: high probabilit) likel to arise once per ear
# 2OSSI3*E: reasonable likelihood that it ma arise over a fve8ear
period
2 4N*I+E*1: pla$sible) co$ld occ$r over a fve to ten ear period
1 R$RE: ver $nlikel b$t not impossible) $nlikel over a ten ear
period
)able 2 *oss or amage impact scale
5'estion/ 'hat is the loss or amage impact if the risk event occ$rred
%severit"6(
Rating
2O)EN)I$* IM2$.)
In terms of the ob/ectives of the cl$b
- .$)$S)RO2,I.: most ob/ectives ma not be achieved) or
several severel a9ected
0 M$7OR: most ob/ectives threatened) or one severel a9ected
# MODER$)E/ some ob/ectives a9ected) considerable e9ort to
rectif i,e, sport in/$r re0$ires medical attention and has some
impact on participation in sport and;or other activit
2 MINOR/ easil remedied) 'ith some e9ort the ob/ectives can be
achieved i,e, sport in/$r re0$ires frst aid treatment and
prevents immediate participation in sport and;or other activit
1 NE8*I8I3*E/ ver small impact) rectifed b normal processes
i,e, sport in/$r b$t does not prevent participation
Risk priorit"
&he risk priorit" scale determines the nat$re of the risk and the action re0$ired,
&he are indicators to assist in the decision making of 'hat action is 'arranted for
the risks,
:$estion: 'hat is the risk priorit3
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)able # Risk priorit" scale
IM2$.)
-
.atastroph
ic
0
Ma9or
#
Moerate
2
Minor
1
Negligible
-
$lmost
certain
Extreme
%1(
Extreme
%1(
Ma/or
*2+
Ma/or
*2+
Medi$m
*!+
0
*ikel"
Extreme
%1(
Extreme
%1(
Ma/or
*2+
Medi$m
*!+
Minor
*#+
#
2ossible
Extreme
%1(
Ma/or
*2+
Ma/or
*2+
Medi$m
*!+
Minor
*#+
2
4nlikel"
Ma/or
*2+
Ma/or
*2+
Medi$m
*!+
Minor
*#+
Minor
*#+
1
Rare
Medi$m
*!+
Medi$m
*!+
Minor
*#+
Minor
*#+
Minor
*#+
+e"/
Extreme Extreme risks that are likel to arise and have potentiall
serio$s conse0$ences re0$iring $rgent attention
Ma9or Ma/or risks that are likel to arise and have potentiall serio$s
conse0$ences re0$iring $rgent attention or investigation
Mei'm Medi$m risks that are likel to arise or have serio$s conse0$ences
re0$iring attention
Minor Minor risks and lo' conse0$ences that ma be managed b ro$tine
proced$res
"n example of ho' to $se the risk rating tables is incl$ded in "ttachment ",
Step 0 )reat the risks
Risk treatment involves identifing the range of options for treating the risk)
eval$ating those options) preparing the risk treatment plans and implementing
those plans, It is abo$t considering the options for treatment and selecting the
most appropriate method to achieve the desired o$tcome,
<ptions for treatment need to be proportionate to the signifcance of the risk) and
the cost of treatment commens$rate 'ith the potential benefts of treatment,
"ccording to the standard) treatment options incl$de:
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*
I
+
E
*
I
,
O
O
D
$ccepting the risk for example most people 'o$ld consider minor
in/$ries in participating in the sporting activit as being an inherent risk,
$voiing the risk is abo$t o$r cl$b deciding either not to proceed 'ith
an activit) or choosing an alternate activit 'ith acceptable risk 'hich
meets the ob/ects of o$r cl$b, 7or example) a cricket cl$b 'ishing to raise
f$nds ma decide that a rock climbing competition 'itho$t a properl
trained and accredited instr$ctor) e0$ipment etc ma decide a safer 'a of
raising f$nds,
Re'cing the risk likelihood or conse0$ences or both is commonl
practiced treatment of a risk 'ithin sport) for example $se of mo$th g$ards
for plaers in some sports i,e, contact sports,
)rans!erring the risk in f$ll or in part) 'ill generall occ$r thro$gh
contracts or notices for example o$r ins$rance contract is perhaps the
most commonl $sed risk transfer form $sed, <ther examples incl$de
lease agreements) 'aivers) disclaimers) tickets) and 'arning signs,
Retaining the risk is kno'ing that the risk treatment is not abo$t risk
elimination) rather it is abo$t ackno'ledging the risk is an important part
of the sport activit and some m$st be retained beca$se of the inherent
nat$re of the sport activit, It is important to consider the level of risk
'hich is inherent and acceptable,
:inancing the risk means the cl$b f$nding the conse0$ences of risk i,e,
providing f$nds to cover the costs of implementing the risk treatment,
Most comm$nit non proft sport cl$bs 'o$ld not consider this option,
2hichever option o$ choose to treat a risk) if the risk has rated highl o$ 'ill
need to caref$ll consider necessar policies) proced$res and strategies to treat
the risk, &hese 'ill incl$de:
'hat is needed to treat the risk
'ho has responsibilit
'hat is the timeframe
ho' o$ 'ill kno' 'hen the risk has been s$ccessf$ll managed,
"lso) seek independent advice from o$r broker) ins$rer) solicitor) fnancial advisor
and;or a=liated state bod,
Step - Monitor an review
"s 'ith comm$nication and cons$ltation) monitoring and revie' is an ongoing
part of risk management that is integral to ever step of the process, It is also the
part of risk management that is most often given inade0$ate foc$s) and as a
res$lt the risk management programs of man organisations become irrelevant
and ine9ective over time, Monitoring and revie' ens$re that the important
information generated b the risk management process is capt$red) $sed and
maintained,
7e' risks remain static, 7actors that ma a9ect the likelihood and conse0$ences
of an o$tcome ma change) as ma the factors that a9ect the s$itabilit or cost of
the vario$s treatment options, Revie' is an integral part of the risk management
treatment plan,
"s disc$ssed earlier) risk management is an integral part of all core b$siness
f$nctions) and it sho$ld be seen and treated as s$ch, Risk management sho$ld be
f$ll incorporated into the operational and management processes at ever level
of the organisation and sho$ld be driven from the top do'n,
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$ttachment $
,ow the risk rating works;
Step 1 & 2/ Establish .ontext & Ienti!" risk
" risk identifed $nder phsical sporting environment 8 >Does our cricket
club take all reasonable steps to check feld for foreign objects which may
result in injury to players? 'o$ld be considered as follo's:
5'estion/ Step # $nal"se the risk
Is it likely that some of our club home feld games may not be checked
properly or at all using the CricketNSW feld check requirements
likelihood!3
$nswer/
Mabe *probabilit .es+
5'estion:
If yes" how likely#
$nswer/ )able 1
4ikelihood rating 'o$ld be a >!? *reasonable likelihood+ over a season,
5'estion/ )able 2
If yes" what would be the consequences and$or the loss or damage impact
of those consequences se%erity!#
$nswer/
Impact rating 'o$ld be a >!? *moderate) some ob/ectives threatened i,e,
plaer in/$r ma occ$r b$t can be easil remedied *prevented+) 'ith
some e9ort) ob/ectives can be achieved+,
5'estion/
What is the nature of the risk and the action required#
$nswer/ )able # rate the risk
@iven the likelihood rating is a >!? *possible+ and the impact rating is a >2?
*minor+) the risk rates as a medi$m *level !+ risk on the risk rating scale,
So it is a medi$m risk that is possible to arise over a fve ear period b$t
can be easil remedied,
5'estion/ Step 0 )reat the risk
&ow should it be treated#
$nswer/ Step 0 an -;
Ens$re all vol$nteer cricket team coaches;managers are a'are of their
game da obligations as re0$ired b Aricket BS2 and Aricket "$stralia
$nder their risk management program, Al$b o=ce bearers sho$ld ens$re
that vol$nteer cricket team coaches;managers receive the appropriate
training) information and compliance checklists and provide feedback,
&he sho$ld have frst aid kits and medical plan,
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