Risk Appetite vs Risk Capacity
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Risk Appetite vs Risk Capacity
Facilitator: Ron Browne
Manager Professional Development
ClubsNSW
Risk Appetite vs Risk Capacity
Lloyd Robson
National Business Manager
Tabcorp
Risk Appetite vs Risk Capacity
Presenter: Ron Browne
Manager 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
• Identify
All risks to the business
• Assess
Assess the likelihood of occurrence and the impact
• Evaluate/Prioritise
Rank the risks on the basis of their risk rating
• Control
Eliminate, Reduce, Share/Transfer or Accept
• Monitor
Measure the outcomes and adjust accordingly
Risk Assessment Matrix
Example Club Risk Review
Risk
Likelihood
Impact to
business
Risk
Ranking
Control
CEO
Departure
Medium
Severe
High
Succession planning
and talent identification
Reduced
Cash Flow
High
Bistro Fire
Armed
Robbery
Low
Low
Severe
High
Medium
Actioned
by
CEO &
Chair
Resources needed
Revised
Risk
Ranking
Skills matrix, resumes,
training
Low
Very High
Review market and
marketing
SWOT, Market review,
CEO & staff Demographics and
expenditure review
Medium
Sprinkler System,
Crisis Management
Plan, Staff Training,
Alternate facility
review/ supply
agreement
Fire equipment and
CEO & F&B training, SOPs,
Manager/ negotiation with
Contractor alternate facility or
supplier
Low
Armed Robbery
Prevention training,
Standard Procedures,
car park lighting, timer
safe, emergency alarm
button
Training, car park
lighting, timer safe,
CEO & staff
emergency alarm
button
Low
Low
Medium
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?