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Risk Assessment

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Risk is the new benchmark:

Organisations are moving at a faster rate
Need a systematic, quantitative measure
Risk is becoming the new benchmark for success
Objective,
Repeatable
Helps to make better, more informed decisions

Published in: Government & Nonprofit
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Risk Assessment

  1. 1. Risk AssessmentRisk Assessment
  2. 2. Risk is the new BenchmarkRisk is the new Benchmark • Organisations are moving at a faster rate • Need a systematic, quantitative measure • Risk is becoming the new benchmark for success – Objective, – Repeatable – Helps to make better, more informed decisions
  3. 3. Risk comes from Hazards andRisk comes from Hazards and HarmsHarms • Hazards = A situation that poses a level of threat to life, health, property or environment (an undesired event) • Harms = resulting damages from the Hazard • Risk = The potential that a chosen action or activity will lead to an undesirable event • Control = A method of evaluating potential losses and taking action to reduce or eliminate the potential for an undesired event
  4. 4. Scale of risk – Severity and FrequencyScale of risk – Severity and Frequency Define the level of Risk on a pre-defined Scale: Severity Description Catastrophic Likely to result in death Critical Potential for severe injury Moderate Potential for moderate injury Minor Potential for minor injury Negligible No significant risk of injury
  5. 5. Scale of risk – Severity and FrequencyScale of risk – Severity and Frequency Define the level of Risk on a pre-defined Scale: Frequency Description Frequent Hazard likely to occur Probable Hazard will be experienced Occasional Some manifestations of the hazard are likely to occur Remote Manifestations of the hazard are possible, but unlikely Improbable Manifestations of the hazard are very unlikely
  6. 6. Build a Risk Matrix • The Risk Matrix: tool used in the Risk Assessment process, it allows the severity of the risk of an event occurring to be determined. • Graphically displays the total of each of the hazards/harms that contribute to the risk – Severity = X – Probability = Y – Risk Score = XY Y X RISK (XY)
  7. 7. Minimal Fatal Unlikely Probable
  8. 8. ““Grey areas”Grey areas” • Risks are not always “black and white” • When defining risk management, some organisations find it convenient to categorise risks into the following three regions: • The broadly acceptable region (Generally Acceptable - GA) • The ALARP (As Low As Reasonably Practicable) region; and • The intolerable region (Generally Unacceptable - GU)
  9. 9. GU GA ALARP But how many zones? How to determine ALARP? Probability Severity Generally Acceptable As Low As Reasonably Practicable Generally Unacceptable
  10. 10. 生 旅游态 , 人类回 自然,保 境,筑造让 归 护环 我 共同的未来们 …… How to Apply The Risk MatrixHow to Apply The Risk Matrix • Use Risk Assessment to filter adverse events • What is the risk of the event, versus when it came into the system • Prioritize events by their RISK not their due date • Resolve low-priority events at the source where they are found • Minor Complaints/Non-conformances/Audit findings • Events with little impact can be immediately resolved
  11. 11. 生 旅游态 , 人类回 自然,保 境,筑造我 共同的未来让 归 护环 们 …… How to Apply The Risk MatrixHow to Apply The Risk Matrix • Risk Mitigation: Applies risk assessment to verification and effectiveness in Corrective Action • Are we reducing the risk to the right level? • Are we truly mitigating risk of recurrence?
  12. 12. Where’s the Risk here?
  13. 13. ConclusionConclusion • Risk Assessment is great tool for making informed decisions • Understand your Hazards and Harms within the organisation • Build a scale that makes sense to your organisation
  14. 14. ConclusionConclusion • Plot the scale on a graph to form a Risk Matrix • Determine where the acceptable and unacceptable risk lie • Then, vet that matrix with real-world historical examples • Use the Risk Matrix as a tool within a Risk team to filter adverse events by their Risk
  15. 15. Summary • How can we get to where we really want to be? • Create strategies which • Draw on organisation strengths • Mitigates organisation weaknesses • Exploit all opportunities • Combat threats • Identify organisational risks during appraisal phase. Thank you – Ali Engelbrecht

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