Risk Assessment – What are your priorities?
Dec 31, 2015
It’s that time of year when we are told we need to plan ahead and prioritise our goals for the year. Maybe your business has risk management goals and you’re considering your action plan for the year. If so, I’m including a few ideas here to help you prioritise your risk management action points.
Once you’ve considered the potential harm or damage from your risk factors, think about your current ability to control the risks. If you have a number of action points needed to control your risks, you’ll need to prioritise. Having a list of actions to take in order of significance will assist in getting the actions completed within your timescales and give a sense of positive progress too.
Use the following points to help your prioritisation process:
- Group similar risk factors together to give a list of principle risk factors.
- Score risk factors using a matrix of level of harm against likelihood and list the risk factors with the largest scores first.
- Enter the scores onto a spreadsheet.
- Identify the most urgent actions.
- Decide on factors to consider when trying to prioritise urgent actions e.g. the effect on your business and cost implications.
- Think through the actions that need to be taken to reduce the scores for the most significant risk factors.
- Ensure that the cost of actions is considered but not used as an excuse to put off taking action.
- Consider the results you’ll get from completing the actions and review your priorities again in light of the expected results.
- Look at the residual risk that will remain following completion of the actions. Start to differentiate between those risks that will need on going control measures and those risks that will be eliminated by the action points.
- Decide what your business will accept as a tolerable risk and ensure your action points will reduce the risk ‘as far as is reasonably practicable’.
- Ensure that any of the actions planned do not introduce further risks to the business.
The action points that your risk assessment process develops should be recorded in detail. On many occasions I visit businesses who have their risks under control but they have limited documentation to demonstrate what actions have been taken. This situation means that a liability claim received by the business, especially a spurious claim, will be that much harder to manage effectively. Bringing clarity of thought, proportionality and good documentation to your risk assessment process is key, along with taking positive prioritised actions. This approach will not only help prevent accidents but also go a long way towards keeping your insurance company and enforcement authority happy when they visit.
If you would like more information on the risk assessment process visit http://www.riskmanagementcircle.co.uk/risk-assessment