Section 2: Safety
The Risk Management Process

2. Why use risk management?

We do not like significant disruptions to our lives. We always see major disruptions as negative and remember them for a sustained period of time.

Consider the gas crisis in Victoria, the stage two water restrictions, the blue green algae water crisis that New South Wales suffered through, the crippling fortnight long Auckland based power cuts or the 'I Love You' virus.
water restrictions in the ACT

These events all contributed to high levels of customer dissatisfaction, financial losses, people viewing the business in a negative light. People asked a variety of questions:

  • why was this event not foreseen?
  • why did ‘they’ not plan for this event to happen?
  • where was the contingency plan?
  • why were the public allowed to suffer for such a prolonged period of time with no compensation offered?
  • will they learn from this so it doesn’t happen again?

Many organisations know there are risks in what they do, but do not take the time to create a plan to manage such risks. Most organisations feel the task is just ‘too big’ or there ‘just isn’t enough time’.

bushfire crisis in Victoria

3. Benefits of risk management

Risk management delivers the following benefits:

  • it makes sound business sense

  • it is an essential element of good management

fire danger signs

  • it is an essential process for directors and managers under the Corporations Act, 2001 as they can now be personally sued for negligence

  • it is usually part of the day to day operations of the business, but is rarely documented appropriately

  • it helps minimise the threat of possible negligence claims, insuring legal and other disputes that commonly arise after major disruptions or disasters occur.
                               
Back one page
                                    
Forward one page