Risk Management Plan
Develop a risk management plan for your shared activity or relationship that identifies the risks that may prevent the objectives being met. This can be done jointly or individually and then combined.
1. Purpose of the Risk Management Plan
The purpose of the risk management plan is to allow an organisation to identify and record potential risks. The plan also allows mitigation strategies to be developed and tracked.
The document should be updated whenever is necessary, i.e. following an incident of significant impact on the organisation’s day-to-day operation.
2. Organisational Context
It is not possible to avoid risk entirely. To attempt to do so would mean that the organisation would effectively be unable to function. It would also not be able to take advantage of opportunities as they arise.
The Board should use this heading to describe what their willingness to accept risks is. This should be described in the context of the type of organisation it is. For example: “As a not for profit community organisation we have limited financial resources. Our primary responsibility is to our clients. As recipients of government funding we also have a responsibility to use our resources wisely. These factors mean that the Board’s attitude to risk is generally cautious.”
Stating the organisational context and the Board’s appetite for risk sets the tone for the whole organisation and for the risk management plan in particular.
3. Risk Diagram
The following diagram represents a process to be followed:
Identify the Risks
Use this space to list the main risks you have identified. This work should be carried out in consultation with key stakeholders including staff at all levels of the organisation.
In order to address group-related risks you may wish to use headings such as those in the table below. Please note this is not intended to be a comprehensive list of all the risks organisations are likely to encounter. It is essential that each provider undertakes the risk identification process for itself.
|
Internal |
External |
|---|---|
|
Financial management, for example: Viability / liquidity Fraud control Reducing / insufficient income streams Income loss Poor cost control Insurances not kept up to date |
Funding, for example: Changes in funding agreements Shortfalls in funding programs |
|
Human Resources, for example: Succession planning Poor staff supervision and performance appraisal Staff turnover/ headhunted by competitor Excessive work load and poor staff morale / staff burn-out Difficulties in recruiting suitable staff |
Regulatory environment, for example: Changes in regulatory framework Negative registration reports No internal systems to proactively manage all the factors that drive the performance of the organisation |
|
Property management, for example: Inappropriate stock Contractors fail to perform maintenance contract / Poor response time by contractors Stock transfer liabilities Asbestos Aging / poor quality stock |
Reputation, for example: Public and community perception of the Association Negative comments from press or politicians |
|
Legislation compliance, for example: Privacy Act Corporations Act / relevant Incorporation legislation Anti-discrimination / Disability Services Act OHS Meeting tax requirements |
Competition, for example: Losing opportunities to grow Other providers Unexpected rapid growth |
|
Corporate governance, for example: Lack of appropriately skilled board members Volunteer / board member burn out Board turnover Board fails to appraise CEO performance Conflict on the board Conflicts of interest not managed effectively Difficulty recruiting to the board Director’s insurance not kept up to date Policies and procedures not reviewed Board lacks a value based framework |
Partnerships, for example: Risks from failed partnership arrangements Risk of conflict with partners |
|
Information technology, for example: IT not sufficient for expanded organisation IT not able to produce registration monitoring data IT performance date disaster recovery plan |
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