What is “Risk Management” Process?

1. What is “Risk Management” Process? • Identify Threats/Hazards • Assess the Relative Risks • Implement ControlMeasuresand then… • Monitor and Review

2. Conflict of Interest or Commitment vs Risk • conflict • a potential source of inconsistency between one’s official duties and personal self-interest • Risk • A measure which combines the likelihood and possible severity of consequences of any conflict resulting in inappropriate influence on the objective exercise of one’s official duties

3. Corporate Governance Commercial operations Professional/Public liability Duty of Care Product liability Economic/Financial Mgt. Security/Fraud Legal Insurance Political OH&S Human Resources Loss of Data Property damage Business Continuity Technology Diseases/Public Health Environmental Areas of Risk

4. Types of Conflict • Direct Personal Benefits(bribes, gifts, commissions) • Close Personal Relationships(nepotism, patronage, biased judgement) • Conflict of Commitment(Time management, Intellectual effort, use of Facilities & Equipment) • Research (University funded vs personal/ company I.P. from research)

5. Risk Assessment • Likelihood X Severity of Consequence

6. Consider Likelihood What are the chances the risk will occur? • Almost Certain known to happen in this Organisation • Known to Occur happened elsewhere; could happen here • Could Occurcould happen, but rarely • Not likely could happen, but probably never will • Rare a remote possibility only

7. Consider Potential Consequences What is the worst-case outcome? • Insignificant Receives gift • Moderate….School supply budget overrun by 20% • Major….School cannot deliver course • Critical…… Loss of Intellectual Property with considerable commercial potential while University retains liability

8. LIKELIHOOD  E Rare D Not likely to occur C Could occur (ie heard of ithappening) B Known to occur(ie has happened in the past) A Almost Certain(iea common or repeating occurrence) Negligible Very Low Low Medium Medium 2 MODERATE School supply budget overrun by 20% Very Low Low Medium Medium High 3 MAJOR School cannot deliver course Low Medium Medium High Very High 4 CRITICAL Loss of income plus retain liability Medium Medium High Very High Extreme A Simple Risk Level Estimator CONSEQUENCE  1 INSIGNIFICANT Receives gift

9. Hierarchy of Controls • Elimination • Substitution • Engineering/Design • Administrative controls • Personal Action

10. Hierarchy of Risk Treatments • Avoid • Reduce • Transfer to another party e.g. use of proxy • Retain