Introducing Risk Management Standard AS / NZS 4360: 2004 Click on View / notes pages

1. Introducing Risk Management Standard AS / NZS 4360: 2004Click on View / notes pages

2. Overview • Why focus on risk management? • Outline of AS/NZS 4360:2004 • Key principles • Process steps in risk assessment and management • Practical application in a divisions setting • Where to obtain the standards documents and other resources

3. Why focus on risk management? • Provides reasonable assurance to boards and managers that the division objectives will be achieved within a tolerable degree of residual risk • Some protection for directors and office holders in the event of adverse outcomes • Adverse outcomes may not be as severe • Defence established re proper level of diligence

4. AS / NZS 4360 : 2004 • Prepared by Joint Standards Australia / Standards NZ Committee • Joint technical committee included computer, insurance, finance, safety, occupational health, government, economic and academic representatives • Provides a generic framework for assessing and dealing with risk

5. Key principles • Risk management involves balance between realising opportunities for gain and minimising loss • Defined steps taken in sequence enable CQI in decision making and facilitate improved performance • Needs appropriate infrastructure and culture

6. Key principles • Logical and systematic approach to implementing steps • Best if embedded in philosophy, practices and business processes rather than separate activity or focus

7. Communicate and consult • Why? • Perceptions about risk vary • CQI principle of involving internal and external customers in discussion about the way systems work will enhance the quality of outcomes

8. Summary of the RM steps

9. Establish the context • Addresses the basic parameters in which risk must be managed e.g. the legislative requirements, the political environment, the financial resources available

10. Identify the risks • Agree on what can happen, where and when • Why and how it can happen • Identify tools which can assist in objectively identifying risk e.g. • Hazard audit • Customer feedback • Income /Cash flow reports

11. Analyse risks • Source of risk • Positive and negative consequences • Likelihood • Extent of impact

12. Evaluate risk • Making decisions about which risks need treatment and with what priority • Unacceptable risk • Treatment measures essential • Grey area where costs and benefits need to be taken into account in deciding how to manage risk • Small risk with no treatment necessary

13. Treat risk • Where risks have potential for positive or negative outcome • Treatment plans • Identify responsibilities, budget, expected outcomes of treatment, performance measures, review process • Document plans • Communicate plans • Deal with residual risk

14. Review • Ensure risk management plan remains relevant • Review progress • Share and review lessons from the process and outcomes

15. Practical application • Risk management policy • Staff training in risk management • Risk register • Division Risk management plan within business planning • Risk treatment schedule and integrated action plans • Monitoring and audit documents • Risk management reporting

16. Standards and other resources • Standards: SAI Global • Customer service phone 1300 654646 • Webstore: www.standards.com.au • On line training package www.riskmanagement.qld.gov.au/info/guide • Good practice example • www.riskman.unsw.edu.au/risk