Risk Appetite vs Risk Capacity Seminar brought to you by 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 [email protected] ClubsNSW Learning & Development Team 9268 3000 [email protected] Questions?