Risk management

‘Risk management’ is a formal and structured process of identifying and managing risk.  It involves assessing and then actively managing an organisation’s potential exposure to loss, damage or litigation. Effective practical strategies for reducing risk, such as safety protocols and security devices, can work together with insurance to reduce risk exposure. 

Basic risk management steps

1. Identify each risk with a thorough analysis of the association's operations, activities and business. 
2. The association needs to decide how to manage risks by determining the likelihood of a risk occurring against the potential consequences.  For example, an association may choose to remove the risk by not continuing with a particular activity, or determine that existing control is satisfactory as the impact would be very minor and it is extremely unlikely to occur.
3. Treat risks by considering any existing risk control measures (eg insurance, security alarm, warning signs), deciding whether the existing measures are adequate and considering any additional measures that may be required.
4. Monitor and review the process on a regular basis.  It is important to regularly review if there has been any change in the association's risk position and, if necessary, repeat and review the process set out above.