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Risk Appetite vs Risk Capacity

Risk Appetite vs Risk Capacity

Facilitator: Ron BrowneManager Professional Development

ClubsNSW

Risk Appetite vs Risk Capacity

Lloyd RobsonNational Business Manager

Tabcorp

Risk Appetite vs Risk Capacity

Presenter: Ron BrowneManager Professional Development

ClubsNSW

Housekeeping

Definitions

• Risk the effect of uncertainty on objectives (AS/NZS ISO 31000:2009)

• Risk Management the coordinated activities to direct and control an organisation with regard to risk

• Risk Management policy the statement of the overall intentions and direction of an organisation related to risk management

• Risk Attitude an organisation's approach to assess and eventually pursue, retain, take or turn away from risk

Definitions

• Risk Appetite the amount of exposure the organisation is willing to accept/retain to meet its mission, goals or objectives

• Risk Capacity the amount of risk the organisation can actually accept

• Risk Tolerance the amount of risk the organisation is prepared to carry after risk treatments have been applied

Risk Management Structure

AS/NZS ISO 31000:2009

Types of Risk

• Financial Turnover, reserves, financing

• Human Key personnel, theft & fraud, activities

• Strategic Wrong guidance, poor strategy, no strategy

• Operational Technological, equipment, premises

Types of Risk

• Reputational Governance, management, culture

• Environmental Fire, flood, earthquake, pollution, waste, detrimental impact

• Crisis in any of the above Emergency response/action ( Strategic Planning) and Business Continuity to Recovery

Risk Management Process

• IdentifyAll risks to the business

• AssessAssess the likelihood of occurrence and the impact

• Evaluate/PrioritiseRank the risks on the basis of their risk rating

• ControlEliminate, Reduce, Share/Transfer or Accept

• MonitorMeasure the outcomes and adjust accordingly

Risk Assessment Matrix

Example Club Risk Review

Risk LikelihoodImpact to business

Risk Ranking Control

Actioned by Resources needed

Revised Risk

Ranking

CEO Departure

Medium Severe HighSuccession planning and talent identification

CEO &

Chair

Skills matrix, resumes, training

Low

Reduced Cash Flow

High Severe Very HighReview market and marketing

CEO & staffSWOT, Market review, Demographics and expenditure review

Medium

Bistro Fire Low High Medium

Sprinkler System, Crisis Management Plan, Staff Training, Alternate facility review/ supply agreement

CEO & F&B Manager/

Contractor

Fire equipment and training, SOPs, negotiation with alternate facility or supplier

Low

Armed Robbery

Low Medium Low

Armed Robbery Prevention training, Standard Procedures, car park lighting, timer safe, emergency alarm button

CEO & staff

Training, car park lighting, timer safe, emergency alarm button

Low

Strategies

• Crisis Management Plan– What are the triggers?– What are the actions and who is responsible?– Who should be notified?

• Business Continuity Plan– How will the organisation continue to trade?– What happens with the staff?– What happens to creditors and debtors?– What insurances need to be in place?– How long will it take to recover fully?

Case Studies

• Key Personnel

– Sundance

• Financial

– Centro

• Environmental

– Ardlethan Bowling Club

– Prime7 video

Evaluation Survey

Certificate

Further information and assistance

ClubsNSW Member Enquiries Centre

1300 730 001

enquiries@clubsnsw.com.au

ClubsNSW Learning & Development Team

9268 3000

education@clubsnsw.com.au

Questions?