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Risk Management 101 Tom Dixon (Bright Consulting).

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Presentation on theme: "Risk Management 101 Tom Dixon (Bright Consulting)."— Presentation transcript:

1 Risk Management 101 Tom Dixon (Bright Consulting)

2 ANU Risk Management Matrix Consequence Minor (1) Moderate (2) Major (3) Catastrophic (4) Likelihood Almost Certain (4) M-4H-8E-12E-16 Likely (3) M-3M-6H-9E-12 Possible (2) L-2M-4M-6E-8 Unlikely (1) L-1L-2M-3M-4

3 Likelihood TitleProbabilityHistorical Almost Certain>50%Is expected to occur in most circumstances Likely25% –50%Will probably occur in most circumstances Possible5% – 25%Might occur at some time in the future Unlikely<5%May only occur in exceptional circumstances

4 Consequence Risk Category Minor (1) Moderate (2) Major (3) Catastrophic (4) Reputation & Image Scrutiny required by internal committees or internal audit to prevent escalation. Scrutiny required by external committees or ACT Auditor Generals Office, or inquest, etc. Intense public, political and media scrutiny. E.g. front page headlines, TV, etc. Assembly inquiry or Commission of inquiry or adverse national media. Financial 2.5% of Budget> 5% of Budget> 10% of Budget>25% of Budget Safety and Injury Minor injuries / first aid required First aid and ongoing medical treatment. Probable lost time. Extensive injuries/ possible multiple injuries. Single Fatality Multiple Fatality Operational Loss Minor damage. Loss of operation no more than 1 day. Significant damage to assets. Loss of operation between 1 day to 1 week. Major damage to assets. Loss of operations between 1 week and 1 month. Significant loss of assets. Loss of operations > 1 month. Compliance Minor breach of statue or regulation. Formal warning from regulator. Suspension of activity and prosecution/ financial penalty. Prosecution, financial penalty, cessation of activity. Schedule 2.5% of Duration> 5% of Duration> 10% of Duration>25% of Duration

5 Ratings RatingRequired Action Low Acceptable: Unlikely to require specific application of resources; manage by routine procedures. Monitor and review. Medium Acceptable: Unlikely to cause much damage and/or threaten the efficiency and effectiveness of the program/activity; treatment plans to be developed and implemented by operational managers. Manage by specific monitoring or response procedures. High Generally not acceptable: Likely to cause some damage, disruption or breach of controls. Senior management attention needed and management responsibility specified; treatment plans to be developed and reported to PVC/Executive Director or Vice- Chancellor. Extreme Not acceptable: Likely to threaten the survival or continued effective function of the program or the organisation, either financially or politically. Immediate action required; must be managed by senior management with a detailed treatment plan reported to PVC/Executive Director, Vice-Chancellor and Council.

6 Hypothetical Project A camping trip…

7 Camping Trip Details Four people attending (Chris, James, Sarah and Meg) Chris is managing the trip, however everybody has been assigned responsibilities Two day trip in July 2013 Kosciuszko National Park, NSW Nobody in the group has ever camped before $400 budget Desired outcome is a relaxing weekend

8 Management Strategies StrategyDescription AvoidEliminate, withdraw from or not become involved Mitigate TransferOutsource or insure AcceptAccept and budget

9 Risk Register ItemDescription ID#Identification number of the risk TitleTitle of the risk DescriptionDescription of the risk ImpactImpact of the risk if it is realised Assigned ToIndividual/area that will be managing the risk StatusStatus of the risk (open, deferred, closed) Cost/ExposureCost if the risk is realised Due DateDue date for action or anticipated date that the risk will be realised Risk Category Categorisation of the risk (reputation and image, financial, safety and injury, operational loss, compliance or schedule. LikelihoodLikelihood of the risk occurring (unlikely, possible, likely or almost certain) ConsequenceConsequence of the risk occurring (minor, moderate, major, catastrophic) Risk CalculationRisk calculation as per the ANU Risk Matrix Risk StrategyThe risk management strategy taken (avoid, mitigate, transfer or accept) Mitigation PlanActions that are planned to mitigate the risk Mitigation CostThe cost of the mitigation plan Contingency PlanWhat actions will be taken if the risk still occurs despite the mitigation strategies OwnerWhos overseeing the management the risk Revised LikelihoodThe revised likelihood of the risk occurring after consideration of the mitigation plan Revised ConsequenceThe revised consequence of the risk occurring after consideration of the mitigation plan Revised Risk CalculationThe revised risk calculation as per the ANU Risk Matrix

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