Risk Management Framework November 2004 Risk Facilitator: Dennis J - PowerPoint PPT Presentation

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Risk Management Framework November 2004 Risk Facilitator: Dennis J Clark 9/21/2005 LBA Risk Assessment 1

Purpose Of This CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Presentation • The purpose of this presentation is to: 1. Provide a summary of risk management principles 2. Provide an overview of the Charles Darwin University (CDU) Organisational Level Business Risk Assessment 3. Provide some examples of risk assessment techniques for use in day to day activity. 9/21/2005 LBA Risk Assessment 2

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY 1. Risk Management Principles • Why Risk Management? • Lessons In Risk Management • Risk Management Methodology & Process 9/21/2005 LBA Risk Assessment 3

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Why Risk Management? • Where The World Is Heading • Makes Sound Business Sense • Essential Element of Good Governance • Essential Process For Directors & Officers (Senior Managers) Under Relevant Legislation (CDU, CAC,FMA, Corporations etc Acts) • Provides External Kudos • Defence In Court Actions Or Government Enquiries 9/21/2005 LBA Risk Assessment 4

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Lessons In Risk Management • Already Part Of Day To Day Operations But Not Generally Documented • The Key Is Documentation Of Existing And Proposed Activities • Methodology Critical • Process Important • Courts Can’t Second Guess After The Event • Properly Implemented And Maintained Is A Powerful Process • Can Prevent Failures 9/21/2005 LBA Risk Assessment 5

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY RM Methodology & Process Context: Establish Context Assess strategic, Establish Context organisational & risk management context. Identify Risks Identification: Identify Risks What can go e e t t a wrong? t l t a u c l Monitor u c i s Review Monitor n i n s Review Analysis / Measurement: n u n Analyse Risks o & u Analyse Risks m o C & m Assess expected likelihood & C m & m & o consequence. Review o C C effectiveness of existing Assess & Prioritise Risks controls. Assess & Prioritise Risks Assess / Prioritisation: Compare risks. Set risk priorities. Treat Risks Treat Risks Treatment Options: Reduce likelihood or consequence, * Risk Management Standard (AS/NZS 4360: 2004) avoid, transfer or retain. 9/21/2005 LBA Risk Assessment 6

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Key Concepts Vision/Mission Organisation Defined Strategy Business Objectives Business Objectives Business Objectives Risks Risks Risks Risks Risks Risks Controls Controls Controls Controls Controls Controls 9/21/2005 LBA Risk Assessment 7

Sources of Risk CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Risk Model Risk Categories Risk Internal External Exposures Sources of Risk 9/21/2005 LBA Risk Assessment 8

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY CDU Risk Wheel Business Development & Competition Stakeholders & Education & Legal Liability Curriculum Systems & Information Project Technology Management Finance & Funding People & OHS Operations, Facilities & Environment 9/21/2005 LBA Risk Assessment 9

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Risk Consequence and Likelihood Matrix CONSEQUENCE TABLE Level Descriptor 1 Insignificant 2 Minor 3 Moderate 4 Major 5 Catastrophic LI KELI HOOD TABLE Level Descriptor 1 Rare 2 Unlikely 3 Possible 4 Likely 5 Almost Certain 9/21/2005 LBA Risk Assessment 10

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Risk Consequence and Likelihood Matrix Risk Scoring Matrix CONSEQUENCE LIKELIHOOD Insignificant Minor Moderate Major Catastrophic 1 2 3 4 5 Almost Certain 5 M S H H H Likely 4 L M S H H Possible 3 L L M S H Unlikely 2 L L L M S Rare 1 L L L L M 9/21/2005 LBA Risk Assessment 11

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Inherent vs. Assessed Risk Effectiveness of existing management processes to mitigate risk exposures Inherent Risk Assessed Opportunity for further Risk risk reduction strategies 9/21/2005 LBA Risk Assessment 12

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Risk Evaluation unacceptable risks increasing risk risks requiring management action cut-off acceptable risks 9/21/2005 LBA Risk Assessment 13

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Risk Treatment Options Accept the level of risk ACCEPT O O Reduce likelihood or P P REDUCE consequence T T I I O TRANSFER Shift responsibility to O N third party N S S Do not proceed with AVOI D the activity 9/21/2005 LBA Risk Assessment 14

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Levels of Risk Assessment Business wide reviews at Organisation level Project/service line All significant Specialist/specific reviews on a & high risks reviews covered cyclical plan Assignment/task level reviews 9/21/2005 LBA Risk Assessment 15

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY 2. CDU Organisational Level Business Risk Assessment ! Executive Summary. ! Process & Outputs. ! Risk Assessment Process. ! Risk Assessment & CDU Organisational Level Business Risk Profile. ! Risk Register. ! Ongoing Risk Management. 9/21/2005 LBA Risk Assessment 16

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY A. Executive Summary • This Report summarises the results of a CDU Organisational Level Business Risk Assessment conducted at CDU in August/September 2004. • It also provides the Risk Management Plan for CDU. 9/21/2005 LBA Risk Assessment 17

A. Executive Summary CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY • The key strategic risks to CDU are set out in this Report. It is to be noted that there are existing risk mitigation actions (“Controls”) reducing the assessed risk levels. • Actions are strategies to be adopted in the future to further reduce risk. These have been developed by Senior Management at CDU . 9/21/2005 LBA Risk Assessment 18

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY A. Executive Summary • The overall assessment is that the Risk Profile of CDU , while indicating some higher level risks, is acceptable, given that this is an initial assessment and a risk management focus is being introduced at CDU. • Ongoing risk management activities would be expected to reduce the assessed risk levels further over time. • Impact of Risk Events occurring on CDU reputation important to acknowledge. 9/21/2005 LBA Risk Assessment 19

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY B. Process & Outputs • Background Briefings On Risk Management. • Structured Interviews On Organisational Risk Issues With: – VC – VCMG Members – Deans – Heads Of Schools – Campus Leaders – Corporate Managers – Council Members particularly Audit and Risk Committee Members. • Organisational Level Business Risk Assessment, Including Facilitated Development of Risk Actions. 9/21/2005 LBA Risk Assessment 20

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY B. Process & Outputs Organisation Completed Risk Assessment Gather Background Material Develop Guidance Documents Conduct Risk Assessment Governance Interface: Prepare Organisation Prepare Organisation Board Risk Profile Risk Register Audit & Risk Committee Develop Develop Input To Tailored Risk Framework Strategic Plan Training Materials Rollout Guide 9/21/2005 LBA Risk Assessment 21

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY B. Process & Outputs Organisation Completed Risk Register Priority Areas For Risk Treatment Risk Risk Treatment Management Strategies Standard Options Risk Actions Ongoing Reporting & Monitoring 9/21/2005 LBA Risk Assessment 22

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY Risk Treatment Options Accept the level of risk ACCEPT O O Reduce likelihood or P P REDUCE consequence T T I I O TRANSFER Shift responsibility to O N third party N S S Do not proceed with AVOI D the activity 9/21/2005 LBA Risk Assessment 23

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY B. Process & Outputs • Framework & Risk Management Process provided. • Organisational Level Business Risk Assessment completed. • Following documents supplied • Risk Profile, Risk Details & Risk Actions • Formal Risk Assessment Report • Risk Management Plan • Risk Register • Risk Policy • Contract Risk Assessment Procedure • Risk Actions. 9/21/2005 LBA Risk Assessment 24

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY B. Process & Outputs • Formal Actions drafted as input to CDU Strategy document following this process. • Ongoing risk management recommendations provided. • Audit trail for NT Auditor-General & AUQA/AQTF reviews provided. 9/21/2005 LBA Risk Assessment 25

CHARLES DARWIN UNIVERSITY CHARLES DARWIN UNIVERSITY C. Risk Assessment Process • Key Stakeholders. • Steps to Date. • Context. 9/21/2005 LBA Risk Assessment 26