MANAGING BUSINESS RISKS AN OVERVIEW

1. MANAGING BUSINESS RISKSAN OVERVIEW CSU, Northridge January, 2004 Chris Brady University Risk Manager

2. WHAT IS RISK MANAGEMENT? • Risk: The organization’s exposure to accidental loss. • Management: Planning, organizing, Leading and controlling. • “Everyone on campus must be a risk manager.”

3. Classic risk management is no longer adequate

4. IN ORDER TO MANAGE RISK EFFECTIVELY YOU MUST……… • Understand risks associated with your objective. • Understand your role as a part of the CSUN Risk Management Team. • Expand your knowledge base of risk management principles. • Take an active role in the risk management effort at CSUN. • Seek creative solutions to risk managementissues.

5. Why Managing Risk Is Important • Accountability • Raises Awareness • Financial impacts • Program cuts • Premiums • Deductibles • Claims

6. CSUN Insurance Contributions (Premiums)

7. CSUN Insurance Contributions (Premiums) $4,169,434

8. Benefits of Hands-OnRisk Management • Increases awareness of objectives • Puts focus on mission critical objectives • Clear understanding of responsibility & accountability • Improves cross-functional communication • Creates a sense of TEAM-OWNERSHIP • Early identification of risks can result in mitigation activity that significantly reduces exposure

9. SIX STEPS OF RISK MANAGEMENT • 1. Identify and Analyze Exposures • 2. Analyze Feasibility of Alternative Techniques • 3. Select Method of Risk Control • 4. Implement Chosen Techniques • 5. Monitor Results • 6. Modify Techniques

10. STEP 1 – Identify & Analyze Exposures • Identification Tools: • Loss History • Program Outlines • Annual Budget • Meeting Agendas • Purchase Agreements • Inspection and Maintenance Records • Contracts and Leases

11. STEP 2: Feasibility of Alternative Techniques • Avoidance • Transfer of Risk • Retention of Risk • Reduce Risk through Loss Reduction Efforts • Finance Retained Risk • Define Meaningful Standards and Expectations

12. STEP 3Evaluate Loss Potential • Evaluation Techniques • Frequency/Severity of Claims • Publications/Periodicals/Other Universities • Political/Litigation Climate • Anticipate

13. MITIGATION OPTIONS • Control It(prevention & detection techniques) • Share It(co-source; warrants; guarantees) • Transfer It(insurance; hold harmless contracts) • Avoid It(process re-design; eliminate process) • Accept It(cost/benefit analysis) • Residual Risk (Opportunity To Manage)

14. STEP 4 – Implement Chosen Technique • Management Support • Documentation and Notification • Governing Board Approval for Major Actions • Develop Policies and Procedures

15. STEP 5– Monitor Results • Compare Actual Results to Anticipated Results • Consider Environmental Changes • Keep Records/Documents

16. STEP 6– Modify Techniques to Reflect experience • Document Decision Making Process • Maintain a Safety/Loss Control Program • Continue to Monitor Results • Start over at Step 1 !!!

17. CURRENT CHALLENGES • Changing environment – remodel • Budget issues – Circumvent procedures/taking shortcuts • Policies & Procedures – Clearly defined • Safety environment – Constant changes • Communication – Sharing of information • Equipment – Purchasing & Insurance requirements • Maintain a teamwork philosophy, share information, focus on the objective of the college and the impact to future programs.

18. RISK RELATED ACTIVITIES • Lab Environment • Project design & testing • Competitions • Internships • Field Trips • Proper planning, training and supervision for these types of activities will significantly reduce the risk of loss, damage or injury.

19. For Assistance With: • Insurance Issues • Risk Assessments • Ergonomic Assessments • Compliance Monitoring • Claim Management • Training & Staff Development Insurance & Risk Management at ext. 2401

20. Questions & Answers