Risk Management Plan

Topics: Risk management, Management, Insurance Pages: 29 (4278 words) Published: May 28, 2013
Aged and Community Services of NSW and ACT (ACS) have identified a need to support members in strengthening risk management in the Aged and Community Care sector. In response, ACS Consultancy offer services to members in developing and implementing risk management policies and processes. The attached tool is a sample template that is used during consultation with an organisation to create an organisational risk management plan. Gow-Gates also offer an obligation free insurance program audit and gap analysis to all ACS members. Whilst risk management is recognised as an essential component of good corporate governance, a number of recent changes in the industry have highlighted the need to ensure risk management is part of an organisation’s culture, its philosophy, practices and business processes. These include:     The introduction of the Community Care Common Standards and expected outcome 1.6 Risk Management Australian Charities and Not for Profits Commission requirement for a risk management plan (planned implementation July 2014) Increasing focus on disaster management and emergency response A requirement for overnight respite services (NRCP) to develop and implement a risk management plan

Risk management may be defined as the process of identifying, assessing and judging risks, assigning ownership, taking actions to mitigate or anticipate them, and monitoring and reviewing progress. The Australian Standard defines risk as the chance of something happening that will have an impact on [an organisation’s] objectives. It is measured in terms of consequences [the outcome] and likelihood [the rate of occurrence] and if the risk will have a positive or negative impact. A risk rating scale is used to identify risk management priorities. Likelihood The likelihood is related to the potential for risk events to arise. Rating A B C D E Likelihood Almost certain: will probably occur, could occur several times per year Likely: high probability, likely to arise once per year Possible: reasonable likelihood that it may arise over a five-year period Unlikely: plausible, could occur over a five to ten year period Rare: very unlikely but not impossible, unlikely over a ten year period

Produced by Aged and Community Services Assoc of NSW & ACT : Nov 2012

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Consequence The consequence rating is based on the impact or degree of loss or damage. Rating 1 2 3 4 5 Potential impact Catastrophic: most objectives may not be achieved, or several severely affected Major: most objectives threatened or one severely affected Moderate: some objectives affected, considerable effort to rectify Minor: easily remedied, with some effort the objectives can be achieved Negligible: very small impact, rectified by normal processes

Risk priority The risk priority scale determines the nature of the risk and the action required. IMPACT 1 2 3 4 5 A Extreme (1) Extreme (1) Extreme (1) Major (2) Medium (3) B Extreme (1) Extreme (1) Major (2) Major (2) Medium (3) C Major (2) Major (2) Major (2) Medium (3) Minor (4) D Major (2) Medium (3) Medium (3) Minor (4) Minor (4) E Medium (3) Minor (4) Minor (4) Minor (4) Minor (4)

Key 1 2 3 4 Extreme risks that are likely to arise and have potentially serious consequences requiring urgent attention Major risks that are likely to arise and have potentially serious consequences requiring urgent attention or investigation Medium risks that are likely to arise or have serious consequences requiring attention Minor risks and low consequences that may be managed by routine procedures

(Reference: NSW Department of Ageing, Disability and Home Care. It’s Your Business Chapter 6: Risk Management and Australian Standard AS/NZS 4360:2004 Risk Management)

For further information or support in developing a risk management plan please contact ACS Consultancy, on 02 8754 0400 or for further information for an obligation free insurance program audit...
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