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The Australian/New Zealand Standard on Risk Management

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Presentation on theme: "The Australian/New Zealand Standard on Risk Management"— Presentation transcript:

1 The Australian/New Zealand Standard on Risk Management
By Professor J A Cross

2 Modern Development of Risk Management

3 Investments Insurance Environment Security Liability Quality Fire OHS

4 Change Management Human Resource Management
Business Continuity Emergency Planning Innovation Environment Monitor Treat Safety Proactive Management of Risk Identify Quality Production Context Asses Change Management Communicate Investment Governance Human Resource Management Corporate

5 Why develop a standard? To define good practice in risk management
To support new government and industry practice To support legislation requiring risk management To standardize terminology To help integrate risk management practice

6 Objectives One standard for all risks and organisations
To be understood by non experts risk is about managing opportunity as well as loss To define good risk management practice not to specify particular risk management tools or techniques

7 Risk Management The culture, processes and structures that are directed to the effective management of potential opportunities and adverse effects The Process The systematic application of management policies procedures and practices to the tasks of establishing the context identifying, analysing evaluating, treating monitoring and communicating risk

8 Risk Management proactive systematic logical analysis but
takes account of political realities

9 Risk Management AS/NZS 4360

10 Safety Regulations Consult Identify Assess Control Monitor AS4360 Risk Management Consult Context Identify Assess Treat Monitor Feedback

11 Communicate Internal and External
Stakeholder views and needs are important Poor communication is a source of risk Team approach needed to identify risks Ownership of risk management process

12 Context First Think Strategically
Organisation’s Mission and Culture Organisation’s Objectives Stakeholders Strengths and Weaknesses, Opportunities and Threats

13 Risk Management Context
The context of the risk within the organisation Areas of particular concern Deciding resources Deciding scope of risk management activities Legal Requirements Factors which affect ability to manage the risk

14 Criteria for acceptability
Eg: Legal limits Company policy and standards Cost benefit criteria Criteria for unacceptable risk - work must stop

15 Structured Approach Steps of Project Activities to be undertaken
Risks of activities Sources of risk

16 Identification The risk management context Identify studies needed,
scope, objectives, resources generic sources of risk and areas of impact Identify Risks What can happen How it can happen

17 Identification The most critical step of the process
- risks not identified can not be controlled Requires - a systematic and comprehensive approach - imagination - in depth understanding

18 Purpose of Identification
To identify new risks which follow change As part of process prioritisation To ensure best procedures and controls used To make people aware of risks

19 Workforce Involvement
Gives the message that safety matters Helps people understand hazards Trains in hazard awareness

20 Analysis ANALYSE RISKS Consult and Communicate Monitor and Review
Determine Existing Controls Determine Consequences Determine Likelihood Consult and Communicate Monitor and Review Establish Level of Risk

21 Evaluation Comparing against criteria
Deciding whether the risk is acceptable Deciding whether the risk is as low as reasonably practical Deciding priorities for action taking account of wider context of risks communicating with stakeholders

22 Analysis To separate minor risks from major Purpose
To estimate the size of the risk To provide information for decisions To provide information on how to reduce risk Risk analysis should be logical, systematic and as objective as possible

23 Treatment Identify treatment options Evaluate treatment options
Prepare management plan Implement plan Define mechanism for monitoring

24 Treatment Options Avoid - Eliminate Reduce probability RISK
Reduce Consequences Transfer or share - Insurance - Subcontracting Retain and plan RISK CONTROL

25 Treatment Plan What is to be done? Who by? When by?
Where is the budget? What are potential problems? How will the plan be monitored?

26 Monitor and Review Risks - Regularly check for new risks
- Look for new factors increasing risk - Changes in priorities Systems which control risk - Audit - Review

27 Implementation Support of senior management
Develop organisational policy Communicate policy - risk management an integral part of planning Manage risks at organisational level Manage risks at program and team level Monitor and review

28 A decision making process within a Safety management System
Requires Policy Organisation - Management representative - Responsibility and authority - Resources Management Review Plan Act Review Improve

29 Documentation Adequate Auditable Methods Information Sources
Assumptions Results Decisions

30 Why document? To demonstrate that you have undertaken the process with due diligence To communicate with others - about risk - about risk control So you can remember what you did To provide a trail for audit and review

31 What is New? OLD NEW Reactive When it happens What is wrong
Identify hazards Perceived Risks Standard Controls NEW Proactive Formal Procedure What could go wrong Identify hazards and what might happen Assessed risks Develop procedures

32 TV Transmission Tower Maintenance
Context - Government agency - at present no competition - about to be outsourced - key objective is continuity of transmission - key risk public liability from injury of trespassers - many transmission towers are in remote areas

33 Identification Exercise
Hazards - vehicle accidents - heights - radiation - manual handling

34 Also Identified Vehicle checking procedures not always followed
4 Wheel drive training courses specified were not available People were pressured to drive long distances when tired Climbing equipment was not regularly maintained - (person whose job it was had been down sized!) Performance indicator based on minimising downtime - normally climb with power on and rely on communication procedures for reducing power when passing transmitter

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