Risk Management should: 1 create value - resources expended to mitigate risk should be less than the consequence of inaction. Explicitly address uncertainty and assumptions; be systematic and structured; be based on the best available information. Be transparent and inclusive; be continually or periodically re-assessed.
Risk Management should: 1 create value - resources expended to mitigate risk should be less than the consequence of inaction. Explicitly address uncertainty and assumptions; be systematic and structured; be based on the best available information. Be transparent and inclusive; be continually or periodically re-assessed.
Risk Management should: 1 create value - resources expended to mitigate risk should be less than the consequence of inaction. Explicitly address uncertainty and assumptions; be systematic and structured; be based on the best available information. Be transparent and inclusive; be continually or periodically re-assessed.
Risk Management should: 1 create value resources expended to mitigate risk should be less than the consequence of inaction - the gain should exceed the pain 2 be an integral part of organizational processes 3 be part of decision making 4 explicitly address uncertainty and assumptions 5 be systematic and structured 6 be based on the best available information 7 be tailorable 8 take human factors into account 9 be transparent and inclusive 10 be dynamic, iterative and responsive to change 11 be capable of continual improvement and enhancement 12 be continually or periodically re-assessed Risk Management Process: 1 Identification 2 Assessment 3 Management / Action Plan 4 Ongoing Reviews 5 Reporting Navigation of this tool 1 To Identify Risks Click Here 2 To Assess Risks Click Here 3 To Manage/Action Risks Click Here 4 To Review Risks Click Here 5 To Report on Risks Click Here 6 To View/Update Validation Rules Click Here create value resources expended to mitigate risk should be less than the consequence of inaction - the gain should exceed the pain Risk Assessment & Management Plan # Hazard / Risk 1 Risk 1 2 Risk 2 3 Risk 3 4 Risk 4 5 Risk 5 6 Risk 6 7 Risk 7 8 Risk 8 9 Risk 9 10 Risk 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 IDENTIFY Cause or Source Business Process IDENTIFY Category Link to Document Document Type IDENTIFY Existing Controls Likelihood Consequence Cost of Consequence (if known) Risk Priority Almost Certain Major V High Likely Moderate High Possible Moderate Medium Possible Moderate Medium Possible Minor Medium Possible Minor Medium Unlikely Minor Low Unlikely Minor Low Rare Negligible Low Rare Negligible Low IDENTIFY ASSESSMENT Assessment of Existing Controls Action ASSESSMENT ACTION PLAN Action Type Responsibility By When Residual Risk Rating ACTION PLAN Key Risk Indicators Reporting/Monitoring Last Reviewed ONGOING REVIEWS Monitoring Review Frequency (# Months) Next Review Due Responsibility ONGOING REVIEWS Top Risks by Category/Industry Click on appropriate category to get a list of the common risks Board level risks Insurance Industry top 10 risks Manufacturing Industry risks Small Business risks Procurement process risks, consequences & related actions Insurance Industry Climate change Demographic shifts in core markets Catastrophic events Emerging markets Regulatory intervention Channel distribution Integration of technology with operations and strategy Securities markets Legal risk Geopolitical or macroeconomic shocks Manufacturing Industry Are substances used in particular tasks suitable for the tasks? Is there a register of hazardous substances, and an inventory of chemicals purchased or produced and material safety data sheet (MSDS) for each substance? Are hazardous substance containers adequately labelled? Are hazardous substances stored according to respective MSDS? Is plant and equipment suitable for the required tasks? Are all moving parts of plant and equipment guarded to prevent contact with people and property to minimise the risk of injuries and damage, such as crushing, stabbing, cutting, puncturing, shearing, and tearing? Are there systems in place to prevent injury from fragmentation of or flying particles from plant and equipment? Are there systems in place to prevent injury from falling plant and equipment? Are there systems in place to prevent injury from performing a task with plant and equipment in a confined space? Are there systems in place to prevent injury from inadvertent movement of plant and equipment? Are there systems in place to prevent injury from stored energy' in plant and equipment, for example compressed air or hydraulic pressure after turning off plant? Are there systems in place to prevent injury resulting from failure of plant and equipment due to the loss of contents, loss of load, unintended ejection of product, explosion, fragmentation or collapse of parts? Does plant and equipment have adequate power isolation, noise insulation, ventilation and fume extraction? Is the noise level of plant, equipment and the surrounding environment within the legislated noise level set down for your particular workplace? For people using vibrating hand-held equipment or operating vibrating controls (chain saws, sewing machines, grinders, pneumatic drills, and so on) are exposure levels within values recommended by Australian Standard AS2763 ? For drivers of vehicles and tractors, and helicopter and airplane pilots, are the vibration exposure levels within values recommended by Australian Standard AS2670 ? For operators of vibrating platforms on manufacturing/construction sites, are exposure levels within values as per Australian Standard AS2670 ? Are occupational exposures to Ionising radiation, such as X-rays, and gamma-rays equipment, within limits set by WorkSafe Australia Network Health and Medical Research Council (National Standard Recommendations for limiting exposure to ionising radiation) ? Is plant and equipment that generates UV radiation, such as photocopiers, lasers, UV cured inks in the printing industry, and welding emissions enclosed? Are radio frequency exposure levels from TV/FM radios transmitters, radio, microwaves, plastic moulders, induction heaters and so on kept as low as practically possible? Are outdoor workers provided with personal protective equipment and work systems as per WorkSafe Australia - guidance note on the protection of workers from UV radiation in sunlight ? Are tasks performed at temperatures between 16C and 24C for sedentary work, 4C and 24C for light work and 7C and 24C for moderately heavy work? Are tasks performed for more than 2 hours done so at humidity levels between 40% to 60%? Is electrical wiring installed according to Australian Standard AS 3900 ? Are electrical fixtures provided with adequate earthing or other residual current devices? Are any signs of damage to either cable isolation or other electrical fixtures rectified? Are there identified colour coded cable labelled isolators to all switchboards? Are employees prevented from performing tasks in metal enclosures or damp places using electrical tools? Is there a regular inspection of portable cords and extension leads? Are Danger' tags used by electricians when working on plant? Does electrical equipment comply with Australian Standard AS3100 - General Requirements For Electrical Equipment ? Is adequate lighting provided according to Australian Standard AS1680 lighting levels for different types of work ? Is employees' eyesight assessed every two years to determine their ability to continue performing their tasks? Are hazardous conditions that are likely to arise during the use of plant and equipment as a result of friction, fire, explosion, moisture, vapour, gases, dust and ice controlled? Are access and egress arrangements for doorways, passageways, stairs, gangways and so on clear of obstructions, well lit, free of slip hazards and secure? Has lifting, carrying, pushing, and pulling been eliminated from all tasks? Has frequent bending, twisting and stretching been eliminated from all tasks? Has lifting of awkward loads been eliminated from all tasks? Has repetitive work using awkward or constrained postures been eliminated from all tasks? Have slip, trip and fall hazards been eliminated? Are all walkways free of obstructions? Are floors undamaged? Are ladders checked regularly for any damage? Are stairways well lit and properly maintained? Are work stations and benches adjusted to suit the physical dimensions of workers? Are safety devices and emergency back-up arrangements of plant equipment and systems suitable for the tasks being performed? Are plant, equipment, building areas and fixtures maintained and repaired? Are environmental conditions and terrain suitable for the plant and substances that are used? Are hazardous elements, such as electricity, water and incompatible chemicals, segregated? Are systems in place to address conflict between staff? Are systems in place to address poor job satisfaction? Are systems in place to address low job security? Have poor work conditions, such as noise, dust, lack of ventilation and so on been eliminated? Are visitors to the workplace provided with relevant safety information and are they supervised? Are the current work systems appropriate, for example, whether more or fewer people should be involved and whether work procedures need to be revised? Do workers hold the required competency requirements, such as licensing, certification and apprenticeships? Is training and supervision provided to meet the needs of each individual worker? Board Legal Responsibilities (and therefore potential risks) Fiduciary Duty (common law) act in good faith for the benefit of, or in the interests of, the organisation Duty to Act in Good Faith (sect 181 of Corporations Act) A director must exercise their power in good faith in the best interests of the corporation & for a proper purpose Do Not Misuse Information or Position of Director - The law prohibits Board members from using their position to gain an advantage for themselves or another, or to cause detriment to the entity they are governing Do Not Abuse an Opportunity if you become aware of an opportunity as a result of your position on a board then you should not take up tht opportunity for personal benefit at the expense of the organisation Duty to Act with Care & Diligence - Board members must exercise their powers and discharge their duties with the care and diligence of a "reasonable person" in their position. Board members with a high level of expertise will attract a higher standard of care than other members. Avoid Conflict of Interest Avoid Insolvent Trading Avoid Fraud Avoid Negligence Tax tax legislation including any obligations required for charitable income tax exempt status and/or deductible gift recipient status (if applicable). Conditions of funding contractual obligations that exist to any funding bodies. Occupational health and safety must provide a safe workplace for employees, subcontractors, volunteers and a range of others. For example training on fire evacuation procedures, electrical safety, first aid, no smoking in workplace, etc. Industry-specific for example child care and safety in schools. Organisation Constitutional compliance for example rights of members, appointments to the board & their tenure, etc. Privacy important to understand what data is considered to be private as this is subject to tight regulatory controls as to its use, accesibility, accuracy & storage Information Security Environmental Sustainability such as EPA compliance HR for example pay rates, superannuation contribution amounts & frequency, Sick Leave, Overtime, Hiring & Firing procedures Trade Practices Act for example misleading & deceptive conduct, Third Line Forcing, etc Anti-Discrimination Contracts Law Defamation Fund Raising Small Business Financial includes cash flow, budgetary requirements, tax obligations, creditor and debtor management, remuneration and other general account management concerns. Equipment extends to equipment used to conduct the business and includes everyday use, maintenance, depreciation, theft, safety and upgrades. Organisational relates to the internal requirements of a business, extending to the cultural, structural and human Security includes the business premises, assets and people. Also extends to security of company information, Legal & regulatory compliance includes legislation, regulations, standards, codes of practice and contractual requirements. Also extends to compliance with additional rules such as policies, procedures or expectations, which may be set by contracts, customers or the social environment. Reputation entails the threat to the reputation of the business due to the conduct of the entity as a whole, the viability of products/services, or the conduct of employees or others associated with the business. Operational covers the planning, daily operational activities, resources (including people) and support required within the a business that results in the successful development and delivery of products/services. Contractual meeting obligations required in a contract including delivery, product/service quality, guarantees/warranties, insurance and other statuatory requirements, non-performance. Service delivery relates to the delivery of services, including the quality of service provided, or the manner in which a product is delivered. Includes customer interaction and after-sales service. Commercial includes risks associated with market placement, business growth, product development, diversification and commercial success. Also to the commercial viability of products/services, extending through establishment, retention, growth of a customer base and return. Project includes the management of equipment, finances, resources, technology, timeframes and people involved in the management of projects. Extends to internal operational projects, business development and external projects such as those undertaken for clients. Safety including everyone associated with the business: individual, workplace and public safety. Also applies to the safety of products/services delivered by the business. Stakeholder management includes identifying, establishing and maintaining the right relationships with both internal and external stakeholders. Client-customer relationship potential loss of clients due to internal and external factors. Strategic includes the planning, scoping, resourcing and growth of the business. Technology includes the implementation, management, maintenance and upgrades associated with technology. Extends to recognising critical IT infrastructure and loss of a particular service/function for an extended period of time. It further takes into account the need and cost benefit associated with technology as part of a business development strategy. Procurement - common risks & management approaches Risk Category Developing the specification Planning Developing the specification Selecting the purchasing method Purchasing documentation Inviting, clarifying and closing offers Selecting the successful tenderer Inviting, clarifying and closing offers Evaluating offers Negotiations Negotiations Evaluating the procurement process Disposals Contract management Risk Likely consequences Purchase of unsuitable product or service Money wasted Need not satisfied Greater expense Poor competition Totally unacceptable purchase or not most suitable product or service Time lost Increased costs Possible downtime Delay in making the purchase Additional costs for re-tender Inadequate responses from tenderers Reduced competition Delivery schedule not met Increased procurement costs Misuse of resources Most suitable product not obtained Fewer alternatives Most suitable product or service may not be obtained Increased costs Need not satisfied Time lost Increased costs Possible downtime Inadequate responses from tenderers Claims of unfair dealings Unethical conduct Narrow definition or commercial specification (eg. use of brand name) Definition of inappropriate product or service Biased specification Understatement of the need Overstatement of the need Misinterpretation of user needs Insufficient funding Impractical timeframe Probity issues Variety of offers Insufficient responses Products offered not meeting needs Difficult to evaluate Lack of offers from suitable tenderers Need to seek offers again Possible cost variations Failure to obtain value for money Loading of costs in offers Having to modify tender terms and conditions Disruption Low response Loading of costs in offers Variations in offers Having to provide clarifying information, causing delays in tender closing Additional costs Claims of unfair practices Offers with qualifications by tenderers Withdrawal of offers Complaints from tenderers Withdrawal of offers Complaints from tenderers Mistrust by tenderers Need to undertake process again Inadequate statement of requirements Failure to identify potential sources Selecting inappropriate method Terms and conditions unacceptable to tenderers Providing inadequate information Failure to adequately address enquiries from tenderers Actual or perceived favouritism in providing information Actual or perceived breach of confidentiality Insufficient number of responses Increased costs Delayed delivery to the client Poor value for money due to limited competition Reduced competition Increased costs of products or services Inconsistent evaluations Possible complaints from tenderers Subjective not objective evaluation of offers Claims of unethical or unfair practices Loss of faith with tenderers Need to call tenders again Additional costs Delay in delivery Failure to identify a clear winner Claims of unethical and unfair behaviour Complaints from tenderers Failure to fulfil the contract Failure to meet the client's need Contract disputes Delivery delays Cost variations Reduction in value for money Purchase of less suitable product Inefficient use of resources Delays in delivery Need to restart procurement Possible cost of legal action Inability to finalise contract Delays in delivery Variations in cost Inefficient use of resources Contract disputes Invalidity of contract Legal action Poor supplier/customer relationship Contract disputes Selecting an inappropriate supplier Selecting inappropriate product Insufficient number of responses No response from known quality suppliers Failure to follow effective evaluation procedures Breaches of security Offers fail to meet needs Decision made on subjective grounds Not matching the expectations of buyer and tenderer Deadlock on details of agreement Failure to secure mandatory conditions Unfair or onerous requirements on the tenderer in the contract conditions Failure to reflect the terms offered and agreed in the contract Legal action Poor supplier/customer relationship Expense of negotiating out of the contract and paying damages Committing to other associated work prior to main contract existing Cost overruns Delays in delivery Need to restart procurement Contract disputes Failure to satisfy needs Delays in delivery Downtime Legal action Cost increases Failure of contract Full benefits not achieved Delivery of unsatisfactory product Contract/supply disputes Potential liability to pay for unauthorised work Possibility of legal action for perceived breach of contract Unanticipated cost increases Contract disputes Loss of commercial opportunity Unwarranted reliance on supplier for product support Legal action Damage to the agency's professional reputation Delays in delivery Downtime Liability disputes Misuse of resources Legal action Disruption to procurement activities Progress on project disrupted Less expertise Failure to evaluate procurement and management processes Failure to improve procurement and management processes Procurement objectives not achieved Possible failure in the future Not achieving best return Claims of unethical and unfair practices Claims of bias and favouritism to organisations or individuals Reduction in value for money Loss or damage to goods in transit Failure to reflect the terms offered and agreed in the contract Inadvertently creating a contract without the delegate's prior approval Fraud Key personnel not available Failure to identify and address problems Collusive bidding at auction Inadequate tender management Variations in price and foreign exchange Unwillingness of the supplier to accept the contract Failure of either party to fulfil the conditions of the contract Inadequately administering the contract Commencement of work by the supplier before contract is exchanged or letter of acceptance issued Unauthorised increase in scope of work Loss of intellectual property Failure to meet liabilities of third parties (eg. royalties or third party property insurance) Action Analyse need accurately Analyse need accurately Use functional and performance requirements Improve consultation with users Obtain clear statement of work and definition of need Obtain appropriate approvals before undertaking process Improve planning Improve forecasting, planning and consultation with users Improve communication with potential tenderers Implement best practice policies, guidelines and practices Maintain ethical environment Improve training of personnel Put suitable controls and reviews in place Consider using a probity adviser Improve communication with potential tenderers Define the specification in terms of required outputs Use functional and performance specifications Ensure specification is consistent with needs analysis Improve market knowledge Use functional and performance specifications Use functional and performance specifications Implement a control mechanism to review specification before release Be familiar with requirements Use functional and performance specifications Use an Expression of Interest or Request for Information to clarify requirements (be careful not to infringe intellectual property rights or copyright) Improve procurement planning processes Improve market knowledge Seek industry participation Use the Industry Capability Network (ICN) Improve implementation of procurement policies, guidelines and practices Improve tender documentation and clearly identify the evaluation criteria in Request for Tenders Provide staff with appropriate training and experience Use standard documentation prepared by Crown Law Select appropriate documentation for purchase type (ie. goods, services, goods and services, or information technology related) Improve tender planning Assess and allocate risks appropriately Consult with Crown Law Use commercially acceptable terms Provide staff with appropriate tender planning and procurement skills Ensure staff have appropriate tender planning and documentation training and experience Improve tender planning and preparation Review tender documents before issuing them and ensure evaluation criteria contain the critical factors on which assessment of tenders will be based Implement standardised procedures for responding to enquiries Provide staff with appropriate tender management training and experience Respond in a timely manner to enquiries Allow adequate time for tenderers to respond As above Answer queries in writing and provide copies to all potential tenderers Ensure that all potential tenderers are provided with any addenda Establish formal security procedures Train staff in their obligations Perform regular audits and reviews of security processes Advise tenderers of security measures Use appropriate tender advertisement strategy to increase competition (eg. consider advertising tenders in other publications as well as the local paper) Consult with the ICN to identify potential tenderers Provide potential tenderers with advance notice of tender requests Improve tender documentation and specifications Allow sufficient time for tenderers to respond Actions as above for insufficient number of responses Improve your market knowledge Review specifications or conditions Seek feedback from known suppliers on their non-response Provide staff with appropriate tender assessment and evaluation training and experience Improve tender assessment and evaluation processes Maintain, audit and review evaluation procedures Ensure that Evaluation Committee members declare any conflicts of interest Maintain, audit and review security procedures Provide staff with appropriate training and experience and monitor performance Ensure that Evaluation Committee members understand and sign Confidentiality Agreements Improve market knowledge Improve tender documentation Conduct market research Develop functional and performance specifications Ensure evaluation criteria contain the critical factors on which the assessment of tenders will be based and that they are clearly identifiable to tenderers in tender documents Ensure evaluation criteria are appropriate and measurable Ensure that Evaluation Committee members sign Declaration of Conflict and Confidentiality Agreements Provide staff with appropriate tender evaluation, financial and technical skills training and commercial expertise Improve evaluation procedures Improve evaluation criteria and clearly identify them to tenderers in tender documents Reject unacceptable offers Perform financial, technical and company evaluations before awarding contract Procurement Review Committee to review tender and selection process prior to awarding contract Ensure users are involved in the evaluation/selection process Improve technical evaluation procedures and train staff as appropriate Procurement Review Committee to review tender and selection process prior to awarding contract Improve communication, including ensuring that Conditions of Contract form part of the Request for Tender Provide staff with training in contract planning and management Define terms carefully Record each party's obligations Clarify all ambiguities before signing the contract Look at alternatives to share risk Distinguish between essential and non-essential goals and requirements Establish baseline before negotiations Distinguish essential goals from others Consider variations to contract Provide negotiators with adequate training Provide negotiators with adequate training and support Negotiate commercial terms Terms should be fair and reasonable Check final draft of contract with successful tenderer Keep records of all negotiations and agreements Procedure in place to ensure delegate's approval obtained first Provide negotiators with adequate training Agree on prices and the basis of prices Agree on a formula for calculating variations Seek legal redress if non-acceptance causes loss Negotiate but retain integrity of the contract Ensure good contract administration and performance management Hold regular inspections / meetings and ensure progress reports Ensure all staff know responsibilities and conditions Ensure good record keeping and documentation Maintain up-to-date agency procedures and practices Ensure all staff are suitably trained and experienced in contract planning and management Confirm verbal acceptance of contract with written advice Accept all contracts in writing Ensure approvals are received before allowing work to start Ensure all contract amendments are issued in writing Record all discussions and negotiations Confirm instructions in writing Ensure suitable clauses are included in the contract Check that all obligations are covered in the contract Agree on responsibilities Implement appropriate safety standards and programs Include appropriate packaging instructions in specification Agree on insurance cover for supplier to provide Accept delivery only after inspection Know when title of goods is transferred to buyer Maintain an ethical environment Follow and maintain fraud control procedures Include requirement in specification and ensure compliance in post-tender negotiation Know the market Accept risk and manage possible delay Develop systematic evaluation methods, techniques and evaluation criteria Agree on performance criteria (with supplier and customer) Develop good relationships with suppliers Include evaluation clause in the contract Implement performance management strategies Set reserve prices Deal with reputable firms Include disposal clause in initial contract Maintain ethical environment Sell by open tender Document reasons for decision Provide staff with appropriate training Risk Reporting AS AT 01-Jun-14 Adequate Opportunities for Improvement Inadequate No Assessment Totals V High 0 0 0 1 1 High 0 0 0 1 1 Medium 0 0 0 4 4 Low 0 0 0 4 4 Totals 0 0 0 10 10 Catastrophic Major Moderate Minor Negligible Totals Almost Certain 0 1 0 0 0 1 Likely 0 0 1 0 0 1 Possible 0 0 2 2 0 4 Unlikely 0 0 0 2 0 2 Rare 0 0 0 0 2 2 Totals 0 1 3 4 2 10 Colour Code V High High Medium Low R i s k
P r i o r i t y Assessment of Existing Controls L i k e l i h o o d Consequence 0 1 2 3 4 5 V High High Medium Low Risks - # by Priority Term Definition Risk Uncertainty on objectives - can be either positive or negative deviation from what is expected Control Any measure or action that modifies risk. Includes any policy, procedure, practice, process, technology, technique, method or device that modifies or managed risk. Risk treatments become Controls or modify existing Controls once they have been implemented. Residual Risk Risk left over after youve implemented a risk treatment option. Hazard Potential to cause uncertainty. Risk includes the likelihood of it happening. Issue Risk with probability of 100%. Ie. it has eventualised into an existing issue. Business Category Risk Category Controls Asset Management Business Continuity Adequate Infrastructure Management Liability Opportunities for Improvement Finance Environmental Inadequate Clinical Governance Financial Regulatory Compliance Political Service Delivery OH&S Corporate Governance Infrastructure, Assets & Systems Operational Reputation Market / Environmental Strategic Document Type Action Type Consequence Strategic Plan Accepted Likelihood Negligible Business Continuity Plan Reduced (eg. P&P, Training) Almost Certain Medium OH&S Policies & Procedures Transferred (eg. Insurance) Likely Medium Other Avoided Possible Low Unlikely Low Rare Low Consequence Minor Moderate Major Catastrophic Medium High V High V High Medium High High V High Medium Medium High High Low Medium Medium High Low Medium Medium Medium