MANAGING BUSINESS RISKSAN OVERVIEW

CSU, NorthridgeJanuary, 2004

Chris Brady

University Risk Manager

WHAT IS RISK MANAGEMENT?

Risk: The organization’s exposure to accidental loss.

Management: Planning, organizing, Leading and controlling.

“Everyone on campus must be a risk manager.”

Classic risk management is no longer adequate

IN ORDER TO MANAGE RISK EFFECTIVELYYOU MUST………

Understand risks associated with your objective. Understand your role as a part of the CSUN Risk

Management Team. Expand your knowledge base of risk

management principles. Take an active role in the risk management effort

at CSUN. Seek creative solutions to risk management

issues.

Why Managing Risk Is Important

Accountability Raises Awareness Financial impacts

Program cuts Premiums Deductibles Claims

CSUN Insurance Contributions (Premiums)

0200000400000

600000800000

10000001200000

1400000160000018000002000000

1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

LiabilityWork CompIDL, NDI, UIAthleticProperty

CSUN Insurance Contributions (Premiums)

$4,169,434

Benefits of Hands-OnRisk Management

Increases awareness of objectives Puts focus on mission critical objectives Clear understanding of responsibility &

accountability Improves cross-functional communication Creates a sense of TEAM-OWNERSHIP Early identification of risks can result in mitigation

activity that significantly reduces exposure

SIX STEPS OF RISK MANAGEMENT

1. Identify and Analyze Exposures 2. Analyze Feasibility of Alternative

Techniques 3. Select Method of Risk Control 4. Implement Chosen Techniques 5. Monitor Results 6. Modify Techniques

STEP 1 – Identify & Analyze

Exposures

Identification Tools: Loss History Program Outlines Annual Budget Meeting Agendas Purchase Agreements Inspection and Maintenance Records Contracts and Leases

STEP 2:Feasibility of Alternative

Techniques

Avoidance Transfer of Risk Retention of Risk

Reduce Risk through Loss Reduction Efforts Finance Retained Risk

Define Meaningful Standards and Expectations

STEP 3 Evaluate Loss Potential

Evaluation Techniques Frequency/Severity of Claims Publications/Periodicals/Other Universities Political/Litigation Climate Anticipate

MITIGATION OPTIONS

Control It (prevention & detection techniques)

Share It (co-source; warrants; guarantees)

Transfer It (insurance; hold harmless contracts)

Avoid It (process re-design; eliminate process)

Accept It (cost/benefit analysis)

Residual Risk (Opportunity To Manage)

STEP 4 – Implement Chosen Technique

Management Support Documentation and Notification Governing Board Approval for

Major Actions Develop Policies and Procedures

STEP 5 – Monitor Results

Compare Actual Results to Anticipated Results

Consider Environmental Changes Keep Records/Documents

STEP 6 – Modify Techniques to Reflect

experience

Document Decision Making Process Maintain a Safety/Loss Control Program Continue to Monitor Results Start over at Step 1 !!!

CURRENT CHALLENGES

•Changing environment – remodel

•Budget issues – Circumvent procedures/taking shortcuts

•Policies & Procedures – Clearly defined

•Safety environment – Constant changes

•Communication – Sharing of information

•Equipment – Purchasing & Insurance requirements

Maintain a teamwork philosophy, share information, focus on the objective of the college and the impact to future programs.

RISK RELATED ACTIVITIES

• Lab Environment• Project design & testing• Competitions• Internships• Field Trips

Proper planning, training and supervision for these types of activities will significantly reduce the risk of loss, damage or injury.

•Insurance Issues

•Risk Assessments

•Ergonomic Assessments

•Compliance Monitoring

•Claim Management

•Training & Staff Development

For Assistance With:

Insurance & Risk Management at ext. 2401

Questions & Answers