Overview of Risk Management

Risk is a fact of life!  It is something that we deal with every day, although in our day-to-day life we may not formally document its management.  Personal risk management is often performed as an on-the-spot decision to prevent or reduce the impact of an undesirable outcome, or it may be a planned sequence of activities to support a certain outcome.  It is a bit like servicing your car before a long trip to avoid the unnecessary cost, delays and consequences of a breakdown, and to increase the certainty that you will arrive at your destination when you planned to. 

All organisations, whether government or privately owned, will encounter risk. A risk is the potential for a negative consequence to occur.

The risks that you, your work team and your organisation may face through its actions or lack of action can include:

  • breaking criminal or civil law;
  • not meeting other legal obligations;
  • damage to property;
  • Injury to people;
  • loss of income;
  • loss of reputation;
  • lost opportunities;
  • loss of assets.

Risk can be both positive and negative, so we should undertake the same decision forming processes in relation to potential risks that may create uncertainty on our business objectives, but we need to manage the process in a transparent and accountable manner.  This means, identifying and understanding organisational requirements for the assessment of risk, clearly documenting the process and justifying the cost of applying treatments to reduce the likelihood of the risk occurring and where possible, any consequences.

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