Risk Management Paige Anthony Kendall

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 risk Creation and adoption of philosophical statements Risk analysis and evaluation Risk control and reduction of loss exposure Plan implementation Periodic 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 Statement Short 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 aversion Van 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 are Eliminate the risk Transfer the risk to others by contact Retain the risk Risk Reduction

Continued.1 Eliminate the risk Either by avoidance or discountenance If 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 others Transferring 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 risk When 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...3 Risk 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 risk Accept that there will be a negative impact Avoid the risk Change your plans to avoid the problem Mitigate the risk Lessens the impact of the risk Transfer the risk

Plan Implementation Two step process Choose the best management approach for the risk identified. Then develop policies and procedures for each area which include Program development Staff and Volunteer Development Management of agency clientele Site and facility development Public Relations Hilarious Operational Risk Management Video http://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 success Determine accountability and ownership Manage expectations Encourage proactive management practices With a well developed risk management plan you and your agency will be less likely to run into legal issues in the future.

Quiz What are “Unknowns”? What are two ways to eliminate risk? What is the first step to writing a risk management plan? What is one benefit of a risk management plan? What are the three potential risks in a parks and recreation agency?