 Definition Risk Management

 The process of determining the maximum

acceptable level of overall risk to and from
proposed activity, then using risk assessment
technique to determine the innitial level of
the risk and if this excessive, developing a
strategy to ameliorate appropriate individual
risks until the overall level of risk is reduce
until acceptable level.
 Risk management is the identification,
assessment, and prioritization of risks
(defined in ISO 31000 as the effect of
uncertainty on objectives, whether positive or
negative) followed by coordinated and
economical application of resources to
minimize, monitor, and control the
probability and/or impact of unfortunate
events or to maximize the realization of
opportunities
 Risks can come from uncertainty in financial
markets, threats from project failures (at any
phase in design, development, production, or
sustainment life-cycles), legal liabilities,
credit risk, accidents, natural causes and
disaster as well as deliberate attack from an
adversary, or events of uncertain or
unpredictable root cause.
 Risk to What?
 Risk to achievement the objectives
 Risk is “ A chance of of
something happening that can
effect the objectives
 Risk Management does not exist in isolation
by itself or for itself . The Risk Management
exist if need to satisfy the other party in any
condition of the third party.
 What can happen
 How , why can it happen?
 Political
 Technologies
 Economic
 External Events
 Management activities
 People events ( Behavior, culture, gender,
Lifestyle, ETC
 Evaluate the Risk with 2 factors
 i) The probability of something happening that
we don't want
 ii) the consequences if it does.
For Example An airplane flight is a very good
example. The consequence of a airplane crash is
usually the loss of most, if not all life on board -
dreadful. Fortunately, when we fly, the
probability of being in an airplane crash is very
small (1 in 52.6 million according to the National
transportation Safety Board). This very low
probability makes the risk very acceptable
 1. Political
 Those with failure either the government policy
or uncertainties of government political scenario
 For Example
 Wrong political priorities
 Not meeting government agenda
 Too slow or failure to modernize
 Decision based on incorrect information
 Unfulfilled promises to electorate
 Community planning oversight / errors
 2 Economic
 those affecting the ability of the Council to
meet its financial commitments. These
include internal budgetary pressures, the
failure to purchase adequate insurance or the
consequences of proposed investment
decisions.
 For Example
 General/regional economic problems
 Missed business and service opportunities
 Failure of major projects
 Failure to prioritise, allocate appropriate
budgets and monitor
 Inadequate control over expenditure or
income
 Inadequate insurance cover
 Social
 those relating to the effects of changes in
demographic, residential or socio-economic
trends on the Council’s ability to deliver its
objectives
 For Example
 Failing to meet the needs of disadvantaged
communities
 Failures in partnership working
 Problems in delivering life-long learning
 Impact of demographic change
 Crime and disorder
 Technology
 Those associated with the capacity of the
Council to deal with the pace / scale of
technological change, or its ability to use
technology to address changing
demands. They may also include the
consequences of internal technological
failures on the Council’s ability to deliver its
objectives.
 For Example
 Breach of confidentiality
 Failure in communications
 Insufficient disaster recovery for key
data/systems
 Failure of big technology related project
 Breach of security of networks and data
 Failure to comply with IT Security Policy
 Legislative
 Those associated with current or potential
changes in national or International law
 For Example
 Inadequate response to new legislation
 Not meeting statutory duties/deadlines
 Failure to implement legislative change
 Misinterpretation of legislation
 Exposure to liability claims e.g. motor accidents,
wrongful advice
 Breach of confidentiality / Data Protection Act
 Environment
 Those relating to environmental
consequences of progressing the Council’s
corporate objectives (e.g. in terms of energy,
efficiency, pollution, recycling, etc).
 For Example
 Impact on sustainability initiatives
 Impact of planning & transportation policies
 Noise, contamination and pollution
 Crime & Disorder Act implications
 Inefficient use energy and water
 Incorrect storage/disposal of waste
 Competitive
 Those affecting the competitiveness of the
service (in terms of cost of quality) and / or
its ability to deliver best value.
 For Example
 Take over of services by government
 Failure of bids for government funds
 Failure to show value for money
 Accusations of anti-competitive practices
 Customer / Citizen
 Those associated with the failure to meet the
current and changing needs and expectations
of customer and citizens
 For Example
 Lack of appropriate consultation
 Bad public and media relations
 Reputation
 Those relating to public confidence and failure to
recruit high caliber staff
 For Example
 Adverse media attention
 Policies misunderstood or misinterpreted
 Negative implications identified by other which
have not been previously considered
 Failure to keep partners on side
 Breach of confidentiality
 Lack of business continuity plan
 Failure to maintain and upkeep land and property
 Partnership
 Those associated with working in partnership
with another organization
 For Example
 Non compliance with procurement policies
 Poor selection of partner
 Poor contract specification, deficiencies
 Failure of partner to deliver
 Inadequate contract terms & conditions
 Bad management of partnership working
 1. Strategic Risk Management
 How to strategize to tackle and manage the
Risk
 2. Credit Risk
 Default or non payment debtors
 Payment Schedule
 3.Operational Risk
 4. Market Investment , Cash Flow
 5.IT Risk or System management Risk
 6. Legal Risk / Reputation Risk
