NSCA Risk Dollarisation®
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Noon-12.30pm Risk Dollarisation® — A groundbreaking approach to non-financial risk Jillian Hamilton — Managing Director, Manage Damage Jillian saw the need to approach safety and risk in a new way. The result is Risk Dollarisation® where the true cost of business risk is quantified by its damage cost which creates an environment where it is marked, measured and managed. Risk Dollarisation® is a New Language; it is clear, transparent and accurate; it is quantifiable and measurable in dollars; it has assignable costs and Business Units/Individuals are held to account for costs. BUY THE BOOK www.managedamage.com/book
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NSCA Risk Dollarisation®
- 1. 1 Risk Dollarisation® Translating Operational Risks to the Boardroom REDUCED DAMAGE CO$T$ = INCREA$ED PROFIT$ JL HAMILTON 29 August 2018
- 2. 2 Translating Risk & Damage • To be Informed • Non-Financial Risks • Language • Safety Financial Reporting • The Numbers Don’t Lie • ROI (Proving Value in Prevention) • The Costs of Damage • Risk Dollarisation® • Create Action • Futuristic Thinking
- 3. 3 Operations Duty to Inform • If your duty is to be informed • It is the operations responsibility to appropriately inform you • How to define appropriate? • Due Diligence Definition • Informed in a relatable manner – financial
- 4. 4 Non-Financial Risks • Where everything else is numbers… • Where all the rest of the decisions are made…
- 5. 5 Non-Financial Risks • Non-Financial Risk is those items of risk that are not normally managed in monetary or financially reported: – Operational Risk – Compliance Risk – Conduct Risk – IT Risk – Cyber Risk – Third- Party Risk
- 6. 6 Damage Costs • The cost incurred by repercussions (effects) of direct environmental impacts (for example, from the emission of pollutants) such as the degradation of land or human-made structures and health effects. In environmental accounting, it is part of the costs borne by economic agents. • The word “damage” is chosen and used to speak to the commercial/ business/ operational parties of a business whom regularly speak in these terms for stock and accounts of widgets worldwide. • The words and phrases are to frame a commercial approach to risk and its management in terms business owners know, understand and are comfortable to operate within.
- 8. 8 AUS vs UK vs NZ
- 9. 9 Why Do People Go Into Business?
- 10. 10 Profit Goals
- 11. 11 MONEY TALKS • NO MATTER WHICH LANGUAGE –Dolarização do risco –Dolarización del riesgo – –Risk Dollarization –Dollarisation des risques –Risico-Dollarisering –
- 14. 14 Perceptions..
- 16. 16 Financial Approach Safety • Improved Economic Outcomes • New Language • Clear, Transparent & Accurate • Marked, Measured & Manage • Lets Commercially focused people understand Non-Financial Risk • Risk DollarisationTM has positive impacts & results for all entities including workers and companies.
- 17. 17 Damage Costs? IMPORTANT NUMBERS Suitable Duties Medical Counsellors Investigators Public Liability Legal Physio External provider Common law Claims Surveillance Doctors Insurance
- 18. 18 Financial Values Reduce Costs and Identify Value Gather the Hearts, Minds & Pockets
- 20. 20 Why Does it Matter Refer to SWA “Measuring and Reporting on Workplace Health and Safety” - March 2017
- 21. 21 SWA Recommend WHS INDICATORS INTERNAL REPORTS EXTERNAL REPORTS Boards WHS Investors Community Financial indicators of WHS performance # workers’ compensation claims ^ P $ workers’ compensation costs P P P ^ $ fines and regulatory penalties P P P P $ legal fees ^ ^ $ lost revenues ^ ^ $ reputational repair costs ^ $ contingent liabilities ^ P $ WHS incentives paid ^ P ^ ^
- 23. 23 QLD, NSW, SA, NZ Damage Costs Sprains & Strains, Muscular Skeletal % & Back Specifically Industry QLD Claims Cost (17/18FY) NSW Claims Cost (14-15FY) SA Claims Cost (14-15FY) NZ Claims Cost (16/17FY) Back Injury % Sprains & Strains M/Skelet al SSM% Mining - Coal $61,371 $26,400 $18,008 $2,236 19% 49% 25% 74% Electricity - Supply $40,529 $13,800 $18,008 $2,236 19% 31% 28% 59% Construction - Roads & Infrastructure $57,130 $14,700 $18,680 $2,236 15% 49% 25% 71% Transport, Postal & Warehousing – Rail $26,085 $13,600 $25,081 $2,236 19% 41% 27% 68% Public Admin & Safety - Sec & Govt $16,619 $13,000 $18,008 $2,236 19% 51% 25% 76% Education & Training – Primary & Sec $15,904 $10,800 $18,008 $2,236 19% 36% 19% 56% Health Care & Soc Ass - Aged Care $11,581 $8,000 $18,329 $2,236 19% 51% 29% 81%
- 25. 25 Create Action
- 27. 27 Engagement Types -Employees -Gig Workers -Contractors (ABN) -Labour Hire -Subcontractors -Volunteers