MANAGING BUSINESS RISKS
AN OVERVIEW
CSU, Northridge
January, 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
EFFECTIVELY
YOU 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)
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
Liability
Work Comp
IDL, NDI, UI
Athletic
Property
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
CSUN Insurance Contributions (Premiums)
$4,169,434
Benefits of Hands-On
Risk 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:






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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.
For Assistance With:
•Insurance Issues
•Risk Assessments
•Ergonomic Assessments
•Compliance Monitoring
•Claim Management
•Training & Staff Development
Insurance & Risk Management at ext. 2401
Questions & Answers