Risk Management Process
When creating a risk management plan, it is easiest to take the
five step approach. These five steps are:
This refers to the “state of mind” of the
administration of the institution or department. It could be a
youthful optimism bias, or perhaps the department is decentralized.
Perhaps your department is at a high risk because it deals with the
public, do your classroom topics involve heated debate? Departments
and organizations must approach risk management in ways which are
specific to them.
Within this section there are two main divisions of risk. These are
frequency and severity.
A frequent risk is one which occurs often, these include slips and
falls, medical emergencies as well as car accidents. A severe risk
is one which could cause great financial loss or reputation damage
to an organization. Severe risks could include sexual assault,
class action lawsuits for discrimination, as well as death.
Keep the list of risks to a manageable number. This enables the
department to identify and work on a plan. Having too many risks to
deal with will leave your department feeling overburdened and the
task insurmountable. It is important to get feedback on this level
because there may be issues which a manager would not be aware of.
Consult with colleagues and other institutions to get input on
problems at this stage, they may be aware of existing issues or
problems which could arise. Also consult with Enterprise Risk
Management, and most importantly discuss the plan with the people
who it will most directly affect.
Will new policies, procedures, reports need to be created? Will it
be necessary to create a committee to implement the plan?
Do an analysis of how the plan is working or how it is failing. Are
there any specific areas of the plan which could be altered to
better fit the risk? What needs to be changed? Make the necessary
improvements and at a later time re-evaluate how the plan is
working.
