Paige Anthony Kendall Risk Management. What is Risk Management Risk management is a plan that helps you foresee risks, identify actions to prevent them.

Paige Anthony Kendall

Risk Management

What is Risk Management

Risk management is a plan that helps you foresee risks, identify actions to prevent them from occurring and reduce their impact should they eventuate.

It is a list of foreseeable risk, their ranking and priority, to call and who to inform right away in case of the incident were to happen.

Why Risk Management is Important

Risk management allows you to identify the “unknowns,” problems that may occur later on in a project.

For example budget cuts, downsizing, etc Implementing a good plan will allow you to

better predict future outcomes.Ultimately risk management provides insight in

personnel planning and alerts staff of potential risks. The plan will then be analyzed, developed, implemented and monitored to address all issues before they affect your projects cost, performance, and schedules.

Risk Management Planning Steps“The first step in the risk management

process is to acknowledge the reality of risk. “– Charles Tremper

Identification of potential sources of riskCreation and adoption of philosophical

statements Risk analysis and evaluationRisk control and reduction of loss exposure Plan implementationPeriodic plan review

Identify Potential Risks

Determine what the major risks are for your nature of work.

Have all employees determine what they feel are potential risks and turn them into the manager to have them included into the Risk Management plan.

The three most potential risks that Recreation, parks, and leisure services face are; Property damage, public liability and business operation.

Philosophical StatementShort quick building block that builds a

framework for the risk management plan.It should include the agency’s belief in

developing a risk management program.Identify the importance of risk

management to the agency. Identify who is responsible for risk

management with in the company. Also establish limits to that person

authority.

Risk Analysis and Evaluation In this step you should begin to evaluate

the extent of loss exposure.This includes financial cost as well as,

public goodwill and volunteer resources. In this step its wise to set up your own

set of risks and levels of risk aversionVan der Smissen (1990) pg 263

classifies severity of risk in two different ways, financially and the impact on the agency being able to provide services.

Risk Control and Reduction of Loss Exposure

This step analyzes the risks provided during the above phase, and take the necessary steps to minimize the risk.

The four general approaches to this section areEliminate the risk Transfer the risk to others by contact

Retain the riskRisk Reduction

Continued.1Eliminate the risk

Either by avoidance or discountenanceIf you feel the event or program being

offered by the agency is to much of a risk or is not meeting the agency goals for the program. Then that agency should avoid the event/program. (This includes funding's not being met, volunteer numbers, staff numbers etc.)

If the program has been met but is not showing good numbers as far as participants or financial stability, it is best to discontinue the program.

Continued..2

Transfer the risk to othersTransferring risk to a third party for a period

of time.Such as purchase order agreements, lease

agreements, contracts for service, clientele agreements and insurance coverage.

Retain the riskWhen an agency chooses to pay for all or

part of a given risk. The risk can be either Active or Passive.

Active risk is when the risk has be identified

Passive risk is when it is retained through error or oversight

Continued...3Risk Reduction

The area where the agency personnel look at all areas of the agency’s operations to determine what can be done to limit the agency’s exposure to risk.

Purpose is to limit the frequency and severity of losses by the agency and allow the agency to continue its mission.

4 strategies for a risk management plan

Accept the riskAccept that there will be a negative impact

Avoid the riskChange your plans to avoid the problem

Mitigate the riskLessens the impact of the risk

Transfer the risk

Plan Implementation

Two step processChoose the best management approach for

the risk identified.Then develop policies and procedures for each

area which includeProgram developmentStaff and Volunteer Development Management of agency clienteleSite and facility developmentPublic Relations

Hilarious Operational Risk Management Videohttp://www.youtube.com/watch?v=7-x7W_tZ30Q

Periodic Plan Review

Review the management plan periodically. Go over

assumptions and decisions to make sure the risk is still there

and come up with the new risks.

Benefits of Risk Management

Helps to identify risks early and incorporate into plans

Increase the chance of project successDetermine accountability and ownershipManage expectationsEncourage proactive management

practicesWith a well developed risk management

plan you and your agency will be less likely to run into legal issues in the future.

Quiz1. What are “Unknowns”?2. What are two ways to eliminate

risk?3. What is the first step to writing a

risk management plan?4. What is one benefit of a risk

management plan?5. What are the three potential risks

in a parks and recreation agency?