Object Required
To identify and priorities potential risk events & Help develop risk management strategies and risk management plans
Principle
Accept no unnecessary risk. & Make risk decisions at the right level.
Theory
Risk Management step process:
Step 1 – Establish the context
Before risk can be clearly understood and dealt with, it is important to understand the context in which it exists. You should define the relationship between your club and the environment that it operates in so that the boundaries for dealing with risk are clear.
Step 2 – Identify the risks
The purpose of this step is to identify what could go wrong (likelihood) and what is the consequence (loss or damage) of it occurring.
· What can happen? List risks, incidents or accidents that might happen by systematically working through each competition, activity or stage of your event to identify what might happen at each stage.
· How and why it can happen? List the possible causes and scenarios or description of the risk, incident or accident.
· What is the likelihood of them happening?
· What will be the consequences if they do happen?
Risks can be physical, financial, ethical or legal.
Physical risks are those involving personal injuries, environmental and weather conditions and the physical assets of the organization such as property, buildings, equipment, vehicles, stock and grounds.
Financial risks are those that involve the assets of the organization and include theft, fraud, loans, license fees, attendances, membership fees, insurance costs, lease payments, pay-out of damages claims or penalties and fines by the government.
Ethical risks involve actual or potential harm to the reputation or beliefs of your club, while legal risks consist of responsibilities imposed on providers, participants and consumers arising from laws made by federal, state and local government authorities.
Step 3 – Analyse the risks (& evaluate)
This involves analysing the likelihood and consequences of each identified risk and deciding which risk factors will potentially have the greatest effect and should, therefore, receive priority with regard to how they will be managed. The level of risk is analysed by combining estimates of likelihood and consequences, to determine the priority level of the risk (table 3).
It is important to consider the consequences and the likelihood of risk in the context of the activity, the nature of your club and any other factors that may alter the consequences of likelihood of risk.
Risk evaluation involves comparing the level of risk found during the analysis process with previously established risk criteria, and deciding whether risks can be accepted. If the risk falls into the low or acceptable categories, they may be accepted with minimal further treatment. These risks should be monitored and periodically reviewed to ensure they remain acceptable. If risks do not fall into the low or acceptable category, they should be treated using one or more of the treatment options considered in step 4.
The criteria for evaluating the risks at your club are shown below:
Rating LIKELIHOOD (The potential for problems to occur in a year)
5 ALMOST CERTAIN
4 LIKELY
3 POSSIBLE
2 UNLIKELY
1 RARE
Loss or damage impact scale
Conclusion
The importance of risk management in projects can hardly be overstated. Awareness of risk has increased as we currently live in a less stable economic and political environment. Making a sound business case for having a strong risk management program has long been an elusive challenge for many organizations. The question still remains unanswered, “How much value should be placed on preventing loss from a disaster that might never happen?†However it is generally agreed that the consequences of risk management failure can be dire. There is a clear imperative for many companies to develop a strong, consistent, enterprise wide risk management programme, as most prevalent business risks will either remain at current levels or increase By implementing an effective risk management program, companies protect their ability to compete. Nothing is more fundamental to business success
Published Date
04 Jan, 2018
