The Risk Management Process

This is defined in the AS/NZS Standard 4360:1999 as the systematic application of management policies, procedures and practices to the tasks of establishing the context, identifying, analysing, assessing, treating, monitoring and communicating risks.

It is a reiterative process of well-defined steps which, when taken in sequence, enables continual improvement in decision making by providing management with a greater insight into organisational risks and their impact.

Figure 1  Risk Management Process - Overview (text version)

Benefits of Risk Management

• provides a structured framework for more effective strategic planning to ensure maximising of opportunities and minimisation of losses
• widens management perspective and encourages initiative and pro-active behaviour
• contributes to improved organisational efficiency and effectiveness
• optimises the use of resources
• promotes greater openness in decision-making and improves communication
• provides senior management with a concise summary of the major risks affecting the organisation and a mechanism to ensure that appropriate resources are directed towards areas of high risk
• provides a framework for ensuring that unavoidable risks are adequately insured
• provides an effective and systematic approach which enables management to focus on areas of risk in their operations
• improves the level of accountability in the organisation

Links with Strategic Planning

Risk Management is an integral part of the Monash Strategic & Operational Planning process as it provides a comprehensive and structured framework to assist management in identifying and managing key risks in the implementation of cost-effective treatment strategies to achieve the Monash vision.

Each of the Strategic and Operational plans is analysed and organisational risks are identified together with management, assessed and evaluated. Treatment strategies are then developed to address the critical and high risks identified and these action plans feedback into the next planning cycle for each respective area.

Risk Assessment Criteria

The Monash vision and strategic plans for Learning and Teaching, Research, Global Development and Support Services will provide the underlying guidelines for assessment of the rating of each of the risk identified.

Conclusion

Risk Management is widely recognised in both the public and private sectors as an integral facet of effective business practice as it provides management with a deeper insight and wider perspective for the effective management of the organization within a dynamic changing environment.