Informacion

ACT Insurance Authority

GUIDE TO RISK MANAGEMENT

February 2004

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Contents

Introduction 3

The Risk Management Process 4

The steps involved in managing risk 5

Frequently Asked Questions 7

Are there templates to assist the risk assessment activities? 7
Where do I find the details required to undertake a risk assessment? 7
When should I do Risk Management? 7When am I required to complete a Risk Management Plan? 8
Should I use the templates provided with this Guide? 8
What do I need to document? 8
What about Fraud and Integrity Risks? 8
Who can I ask for further information and advice? 9

Useful References 9

Useful Sites 9

Introduction

This Guide to Risk Management for the ACT Government is designed to help you identify keyrisks to your outputs, whether for your Department, Agency, team or individual activity. Managing risk enables your organisation to achieve its potential with the least interference from a risk eventuating. Effective Risk Management also enables you to take advantage of opportunities as they arise.

Risk management applies to all ACT Government decision-making activities, including policydevelopment and advice, outsourcing and outsourced services, contract management, program delivery, public events and enabling services. Risk Management enables us to minimise the barriers to meeting our business objectives.

Risk Management isn’t just about decisions and behaviour that affect expenditure or expose the Territory to liability. Risk Management is about giving the best advice we can toMinisters and stakeholders.

About this Guide

This guide is based on Australian/New Zealand Standard AS/NZS 4360:2004 - Risk Management (the Standard) and describes how to meet the requirements of the Territory’s Risk Management Policy Statement. For further details on any aspects of Risk Management, please refer to
a. the Standard (www.standards.com.au), and
b. the ACTGovernment’s Enterprise-wide Risk Management Framework.

Definition of Risk

A risk is defined by the Australia/New Zealand Standard for Risk Management (AS/NZS 4360:2004) as

“…the possibility of something happening that impacts on your objectives. It is the chance to either make a gain or a loss. It is measured in terms of likelihood and consequence.”

The effective management of riskenables you to maximise opportunities and achieve your outputs.

The Risk Management Process

The steps involved in managing risk

Establish Goals and Context

As outlined in the Risk Management process, the risk assessment is undertaken within the context of your goals. The identification / validation of your goals is therefore a critical first step in the risk management process.Effective risk management requires a thorough understanding of the context in which your Department or Agency operates. The analysis of this operating environment enables you to define the parameters within which the risks to your outputs need to be managed.

The context sets the scope for the risk management process. The context includes strategic, organisational and risk management considerations.According to the Standard, strategic context defines the relationship between the organisations and its environment. Factors that influence the relationship include financial, operational, competitive, political (public perceptions / image), social, client, cultural and legal. The definition of the relationships is usually communicated through frameworks such as the SWOT (Organisationalstrengths, weaknesses, opportunities and threats) and PEST (Political, Economic, Societal, and Technological).

The organisational context provides an understanding of the organisation, its capability and goals, objectives and strategies. According to the Standard, organisational context is important because:

a) risk management occurs within the context of endeavouring to achieve the goals and...