Risk Management Guidlines for Assessment
This document provides guidance for risk management and specifies the elements of the risk management process. The design and implementation of the risk management system will be influenced by the varying needs of FIREtrain, its objectives, products and services, and the processes and specific practices employed. This process will be applied at all stages of the activity, function, product or asset from strategic and operational perspectives.
Objective
- a more confident and rigorous basis for decision-making and planning;
- better identification of opportunities and threats;
- gaining value from uncertainty and variability;
- pro-active rather than re-active management;
- more effective allocation and use of resources;
- improved incident management and reduction in loss and the cost of risk, including commercial insurance premiums;
- improved stakeholder confidence and trust;
- improved compliance with relevant legislation; and
- better corporate governance.
Benefits
Management of risk is an integral part of good business practice and quality management. To effectively enable staff to improve outcomes by identifying and analysing a range of issues and providing a systematic way to make informed decisions. A structured risk management approach also enhances and encourages the identification of greater opportunities for continuous improvement through innovation. Risk management techniques provide with a systematic approach to managing the risks that are integral parts of their responsibilities.
Benefits: pursue opportunities; improved planning, performance and effectiveness; economy and efficiency; improved information for decision making; enhanced reputation; accountability, assurance and governance; personal wellbeing for all staff.
Application
The risk management process to be applied in the decision process of an activity or function, formally or informally, for any decision and applied when planning and making decisions about significant issues e.g. when considering changes in policy, introducing new strategies and procedures, expenditure, managing internal organisational differences or managing potentially sensitive issues.
Governance
Risk management contributes to good governance by providing reasonable assurance that objectives will be achieved within a tolerable degree of residual risk. Adverse outcomes may not be as severe as they might otherwise have been and those accountable can, in their defence, demonstrate that they have exercised a proper level of diligence. To focus on positive outcomes to enhance organisational performance. Provides a structure to facilitate communication and consultation between management and personnel at all levels on defining and achieving organisational goals.
Consequence Criteria
FIREtrain have derived a set of criteria for the analysis. These will be used to determine the specific scales against which the consequences of risks will be assessed in the stages of the risk analysis.
Identify the risks to be managed; what can happen, where and when, that might have an impact on the achievement of each of the objectives, events that might prevent, decay, or delay or enhance the achievement of those objectives. Why and how it can happen: when identified, it is necessary to consider
possible causes and scenarios. Tools and techniques: Approaches used to identify risks include checklists, judgements based on experience and records, flow charts, brainstorming, systems analysis, scenario analysis and systems engineering techniques.
Risk Rating Matrix: for determining the level of risk
Step 1. Consider the Consequences
What are the consequences of the risk occurring? Consider what could have happened as well as what actually happened. Look at the descriptions and choose the most suitable consequence.
Severe: Operation or process will not occur
Major: Will affect operation, requiring assistance and change to process
Moderate: May have effect on operation or process but can be easily rectified
Minor: Will not affect operation or process
Step 2. Consider the Likelihood
What is the likelihood of the consequence identified in Step 1 happening? Consider this without new or interim controls in place. Look at the descriptions and choose the most suitable Likelihood.
A: The event is expected to occur
B: The event is likely to occur in most circumstances
C: The event could occur sometime
D: The event may occur, but probably never will
Step 3. Calculate the Risk
1. The event is expected to occur
2. The event is likely to occur in most circumstances
3. The event could occur sometime
Risk Evaluation and Treatment
Risk evaluation uses the understanding of risk obtained by analysis to make decisions about future actions, for example: whether a risk needs treatment, whether an activity should be undertaken, priorities for treatment.
To consider the objectives of FIREtrain and the objectives of the risk exercise decisions may be based on the level of risk and thresholds of specified consequences; the likelihood of specified events or outcomes; the cumulative effect of multiple events; and the range of uncertainty for the risk levels at some specified level of confidence. Criteria may be expressed quantitatively or qualitatively.
Actions need to be reasonably practicable to represent an objective view, taking account of the needs of all those affected and subject to the risk. Identifying options preparing and implementing treatment plans: proposed actions; resource requirements; responsibilities; timing; performance measures; and reporting and monitoring requirements.
Contingency planning
Planning and preparedness for contingencies is to act quickly to prevent or limit disruption. When an event occurs FIREtrain staff will be required to respond quickly to mitigate the impact of the occurrence.
Insurance
FIREtrain managements is to ensure all insurances are relative, adequate and current.
Monitoring and Review
FIREtrain management and staff are required to monitor and review the Risk Management Assessment at regular intervals to ensure it remains relevant. Factors affecting the likelihood and consequences of an outcome may change the suitability of the treatment options. Monitoring and review involves learning lessons from the risk management process by reviewing events, treatment plans and their outcomes. Post event analysis will allow FIREtrain to assess the suitably of proposed outcomes and incorporate changes and improvements to the assessment criteria and procedures.
