Risk Management

1.Risk management is a process of thinking systematically about all possible risks, problems or disasters before they happen and setting up procedures that will avoid the risk, or minimize its impact, or cope with its impact. It is basically setting up a process where you can identify the risk and set up a strategy to control or deal with it. It is also about making a realistic evaluation of the true level of risk. The chance of a tidal wave taking out your annual beach picnic is fairly slim. The chance of your group's bus being involved in a road accident is a bit more pressing. There are a number of reasons why a community or non-profit group should put some time into considering risk management and it does go beyond the recent issue of rising insurance premiums. For your own safety: You want an atmosphere where everyone in your group feels safe and secure and knows their safety and security is one of the paramount considerations in every activity your group undertakes. A group that does this is normally a group that boasts a happy, loyal and effective membership or volunteer force. For the safety of the people you are trying to help: The mission of most community groups is to help people, not harm them. If you are providing services for outside clients/groups the aim is to enhance their lives not do something that causes them pain, either physical or mental. Australian standard for risk management Recently, Standards Australia released a new edition of the Risk Management Standard. AS/NZS ISO 31000-2009 Risk Management – Principles and Guidelines replaces AS/NZS 4360-2004 Risk Management as the leading resource available to Australian facility managers, directors, top-level executives and others responsible for managing an organization’s risks and achieving objectives. “The new International Standard is based on AS/NZS 4360-2004 and was shaped with input from experienced members of Standards Australia and Standards New Zealand’s committee for Risk Management, OB-007, and experts from some 28 countries representing all continents. Australia has a lot to be proud of.” The new International Standard provides organizations with guiding principles, a generic framework and a process for managing risk. The new edition emphasizes that risk is the effect of uncertainty on objectives, not just an event. 2. Anti-discrimination legislation Anti-discrimination legislation is enforceable by law and must be complied with. The Anti-Discrimination Act 1991 is described as an Act to promote equality of opportunity for everyone by protecting them from unfair discrimination in certain areas of activity and from sexual harassment and certain associated objectionable conduct. This act is a public act and applies to any form of communication to the public, including by speaking, writing, printing, displaying notices, broadcasting, telecasting, screening or playing of tapes or other recorded material, or by electronic means. As well as any conduct that is observable by the public, including actions, gestures and the wearing or display of clothing, signs, flags, emblems or insignia. Ethical principles As a business owner and operator may wish to formulate your own ethical principles to map out the key values you and your employees will be governed by. The ethical principles together are often referred to as a Code of Ethics. While these in themselves will not be enforceable by common law or legislation, it is important to recognize that legislation prohibits or limits certain acts. A Code of Ethics is intended to assist you and your employees in identifying and resolving ethical issues that might arise. Ethical principles may include statements referring to: • Respect for people • Equality and justice • Integrity and impartiality • Accountability and transparency • Personal and professional responsibility. Codes of practice As a business owner and operator you may wish to draft your own Code of Practice based on your ethical principles to guide employees on the way to conduct themselves in the workplace or when they are representing your organization. The rights of employees to be treated fairly and equitably in the workplace; Avenues for resolving complaints or breaches of policies and Codes; and the legal and ethical obligations and expectations of all staff to act in accordance with the expressed standards of conduct, integrity and accountability contained in relevant legislation, work policies and Agreements. Privacy laws Personal information is the lifeblood of many businesses. This is because a large number of business transactions rely on the use of personal information of customers. When your business collects and uses personal information, you should protect and respect your customers’ privacy. Respecting privacy helps garner customer trust and that’s why we like to say ‘good privacy is good businesses’. You may disclose a client’s or contacts personal information to service providers such as, but not limited to, graphic design firms and mail houses, but only so they can provide the services contracted out to them. If clients or contacts have any enquiries regarding the information held about them, you may want to nominate a person as a Privacy Officer, who can answer any queries. You should only collect personal information directly from individuals that is necessary to meet or fulfill your activities and functions or for direct marketing. Your business may also have to comply with other terms of the Privacy Act. The Privacy Act sets out rules about information handling, including how your business may collect, use, store and disclose personal information. OHS OHS is an acronym for Occupational Health and Safety. This is sometimes referred to as Workplace Health and Safety. It seeks to protect your health and safety and the health and safety of everyone at a workplace, while undertaking work activities or using specified high risk plant. Health and Safety may refer to policies on drugs, smoking and alcohol, confidentiality, fire, evacuation and emergency procedures, first aid facilities, fitness for duty, protective equipment or clothing, security and proper reporting of incidents. As an employer, there are standards which must be adhered to including: • Providing and maintaining a safe workplace • Developing and monitoring procedures for the safe use, handling, storage and transport of goods and substances • Maintaining the workplace in a safe and healthy condition • Providing adequate facilities to protect the welfare of all employees • Providing information, training and supervision for all employees enabling them to work in a safe and healthy manner. The actual Act itself either prohibits exposure to a risk or prescribes ways to prevent or minimize exposure to a risk. If a regulation exists for specific risks at your workplace (e.g. noise, hazardous substances, underwater diving, high risk plant, confined spaces), in order to meet your obligations under the Act you must do what the regulation says to prevent or minimize the impact of the risk. 3. Risk management tools means atool which help you identify hazards and control risks in an office environment. It is designed to assist persons conducting a business or undertaking, workers and health and safety representatives operating. Risk Management frameworks means the set of components that provide the foundations and organizational arrangements for designing, implementing, monitoring, reviewing and continually improving risk management throughout the organization which the Standard notes that the framework can include: The policy, objectives, mandate and commitment to manage risk. The organizational arrangements include plans, relationships, accountabilities, resources, processes and activities For example: If the business does not complete a contract by a certain time they will lose money and so they plot out ways to avoid this by making sure all aspects dealing with the contract from employees to computer data are completing their functions to avoid this. 4. Work Place: Thai Restaurant: Operational level personal a) Restaurant’s policies and procedures relating to risk management processes and strategies: i. Food safety Food safety is one of the most important tasks given to a restaurant manager and staff; policies and procedures must be followed in order to ensure that food-borne illnesses are not allowed to spread. Hand washing: The most important policy to follow is proper hand washing procedures. Hang a hand washing poster over each sink, and ensure that all team members follow it religiously. Dishwashing: Follow all state laws in regards to dishwashing procedures. Use a three sink method, utilizing wash, rinse and sanitize procedures. Keep test strips nearby to test sanitizer water frequently. ii. Accident Report Employees are responsible for the immediate reporting, to their Supervisor or Duty manager, any workplace injury or accident or illness; no matter how trivial or minor it may seem to the individual. iii. Manual Handling As stated in our Health and Welfare Policy, employees have a general responsibility to protect their own health and safety at work. This includes ensuring safe and sensible manual handling practices are used. The restaurant will take all responsible steps and precautions to eliminate or minimize manual handling risks. All new employees are to be provided with training on correct manual handling procedures during orientation. b) Auditing requirements relating to risk management: The typical audit is far too detailed to be completed without checklists for carrying out the audit steps. Checklists also serve as documentation that audit work is complete. Processing audit checklists involves a supervisory review that covers a number of items. These items include ensuring the checklists are customized for particular audits and ensuring that auditors have followed the checklist. For example, Non-Slip Shoes: this can actually be quite dangerous and put employees at risk of being seriously injured. c) My role as an OHS officer to ensure the overall health and safety of the restaurant: All employees have a responsibility to ensure that nothing is done to make health and safety provisions less effective. In particular they must… Follow OHS rules. Ensure that they do not endanger any other person through any act or omission at work. Report accidents injuries and “near misses” incidents to the Manager as soon as possible after the event. Ensure that then correct use is made of all equipment provided for health and safety purposes. Obey all instructions, such as policies and procedures issued to protect their own personal health and safety and the health and safety of others. Keep the work area tidy. d) Risk Management tools used: Likelihood scale Level of risk scale Risk matrix Scale for evaluating risk 5.Window Cleaning Business: Public liability and safety a)Commercial and legal relationship in according to Public liability and safety: A business that leases property may be financially responsible for damage/destruction of the leased property and loss of less or rental income. A business may have contractual liability to property owner for failure to comply with lease terms. A business may be financially responsible for damages arising from the acts of its employees or agents in the scope of their work. A business may have direct liability for damages arising from its own negligent hiring, supervision, and retention of an employee or agent. A contractor may disrupt a business' operational plans by failing to complete work on time on an essential business asset. b) Potential Sources of Economic Circumstances Risk Inflation (a continuing rise in the general price level). Deflation (a continuing decrease in the general price level). Recession (a period of reduced economic activity in the region or nation). Recovery (a period of rebounding economic activity following a recession). Interest rates (the amount charged by lenders to borrow money) and lending requirements (other requirements borrowers must meet to borrow money – such as providing collateral). International currency exchange rates (the price at which one nation's currency trades for another nation's currency). Competition (the degree to which the business has rivals for customer business). Government expenditures (the government's spending policy) c) Potential Sources of Human Behavior Risk Negligent behavior (failure to use reasonable care under the circumstances). Intentional behavior (behavior that is deliberate, although the consequences may not be anticipated). Criminal behavior (behavior that is forbidden by law or failure to behave as required by law, which subjects the offender to legal punishment). Positive behavior (other behavior that benefits the business). Negative behavior (other behavior that damages the business). d) Individual activities which can create risk in this venture Harassment Discrimination Insider trading Fraud e) Management Activities and Controls which can create risk in this venture Decisions on core products or services to be provided to customers Decisions on the most profitable customer segments and markets to be pursued Application and co-ordination of labor to best service customer needs, produce adequate returns, and motivate individuals Selection of buildings, equipment and other resources to maximize productivity and return on investment Maintenance and efficient operation of facilities and equipment (including motor vehicles) f) Natural event which can create risk in this venture Storms lightning, hurricane, cyclone, flood, tidal wave or surge Earthquake, volcanic activity Changes in temperature or climates Diseases, vermin g) Political Circumstances which can create risk in this venture Changes in legislation, government policy or political parties Changes in trade policy, barriers or tariffs Threat of confiscation/expropriation of assets located in volatile political environments Political unrest, nationalization, war or civil disturbances h)Technology and Technical Issues which can create risk in this venture Obsolescence and rapid changed in technology effecting production techniques and management information systems Unpredictable failure of safety devices, power or communication systems Security of systems from internal and external sources (virus and system hackers) Effect of ecommerce strategies and market trends on the business RISK MANAGEMENT 9