Risk Management

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Paul Ticher @ 2009 Lasa Circuit Rider Conference
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We take risks all the time because we judge that the reward is worth it. But in our professional lives we have to be professional about how we make that judgement – for ourselves and our clients. This session will look at how to do risk management properly without getting hung up on it, as well as presenting practical tools.

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Risk Management

  1. 1. Risk Management Paul Ticher [email_address]
  2. 2. What are we talking about? <ul><li>“ Unwanted and unintentional events” </li></ul><ul><li>Hazard </li></ul><ul><li>Likelihood </li></ul><ul><li>Severity </li></ul>
  3. 3. How people approach risk <ul><li>Life cannot be lived without risk </li></ul><ul><li>Everyone is a risk manager </li></ul><ul><li>We consciously take risks in order to obtain rewards </li></ul>
  4. 4. Risk versus reward RISK
  5. 5. The ‘risk thermostat’ <ul><li>Everyone has a level of risk they are comfortable with </li></ul><ul><li>We compensate for perceived risk </li></ul><ul><li>If we don’t alter people’s propensity to take risks we may redistribute the burden of risk, not reduce it </li></ul><ul><li>Potential safety benefits tend to get consumed as performance benefits </li></ul>
  6. 6. We’re not very good at judging risk <ul><li>We find it hard to judge relative risk </li></ul><ul><li>We are strongly influenced by: </li></ul><ul><ul><li>our beliefs </li></ul></ul><ul><ul><li>our experience </li></ul></ul><ul><ul><li>risks we can easily imagine </li></ul></ul><ul><ul><li>risks that are well-reported </li></ul></ul>
  7. 7. Risk management cannot be exact <ul><li>People will not necessarily behave the way we want them to </li></ul><ul><li>Nature is always unpredictable </li></ul><ul><li>Science (and other changes) bring new risks </li></ul>
  8. 8. The risks we face <ul><li>Human </li></ul><ul><li>Financial </li></ul><ul><li>Operational </li></ul><ul><li>Technical </li></ul><ul><li>Management & governance </li></ul><ul><li>Intangible </li></ul><ul><li>Catastrophic </li></ul>
  9. 9. Options for dealing with risk <ul><li>Avoid </li></ul><ul><li>Reduce the likelihood </li></ul><ul><li>Reduce the severity </li></ul><ul><li>Transfer </li></ul><ul><li>Ignore </li></ul>
  10. 10. Managing risk <ul><li>Allocate responsibility </li></ul><ul><li>Carry out a risk assessment </li></ul><ul><li>Document the findings </li></ul><ul><li>Decide where action is needed </li></ul><ul><li>Communicate with staff and others </li></ul><ul><li>Review regularly </li></ul>
  11. 11. Risk assessment <ul><li>Take expert advice if necessary </li></ul><ul><li>Consult people on the ground </li></ul><ul><li>Don’t just rely on your own past experience </li></ul>
  12. 12. Risk assessment  SEVERITY   LIKELIHOOD   High severity Low likelihood  High severity Medium likelihood  High severity High likelihood  Medium severity Low likelihood  Medium severity Medium likelihood  Medium severity High likelihood  Low severity Low likelihood  Low severity Medium likelihood  Low severity High likelihood

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