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Using risk management to survive and thrive. ACEVO Conference November 2011. Paul Emery Head of Community and Social Organisations Zurich Tilden Watson, Zurich Risk Engineering. Through the risk management maze. Risk Expertise Take full advantage of future opportunities

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Using risk management to survive and thrive

Using risk management to survive and thrive

ACEVO ConferenceNovember 2011

Paul Emery

Head of Community and Social Organisations Zurich

Tilden Watson,

Zurich Risk Engineering


Through the risk management maze
Through the risk management maze

  • Risk Expertise

    • Take full advantage of future opportunities

    • Confidence for commissioners supply chain

    • Enables innovation

    • Those that most effectively embrace manage risk (and have the capacity and resilience to take on more risk) will be the most successful

  • Guide to help demystify risk management.

  • We believe in keeping risk management practical and proportionate.

  • This session will seek to explore some of the current risk challenges.


  • Surviving and thriving

    Threats to our resilience

    The resilience of others

    Living with risk?


    What is resilience
    What is Resilience?

    Resilience:

    • Ability to resist shocks

      ………or, to……..

    • ‘Bounce back’ quickly when the unexpected happens

    Business resilience:

    Having processes in place for planning, organising and controlling the activities of the organisation in order to minimise the effects of risk.


    Building a resilient organisation
    Building a resilient organisation

    Surviving and thriving

    Managing risks

    Corporate planning

    Opportunity selection

    Setting an appetite

    Understanding and managing the supply chain

    Robust crisis management approach

    Business Continuity Planning (BCP)

    Being prepared


    Quick exercise

    Quick exercise


    How do the results compare tough choices medium term view
    How do the results compare? years (use template No 2)Tough choices – Medium term view

    • Loss of funding / financial instability

    • Continuity and crisis response

    • Damage to reputation and brand equity

    • Comprise to charitable aims and purpose

    • Commissioning environment

    • Execution of organisational change

    • Short term decisions

    • Workforce planning and capacity

    • Governance failure and data loss

    • Gaps in the CSO network

    • Partner and supply chain failure


    How do the results compare years (use template No 2)Global risks sixth editionLonger term view(produced in collaboration with Zurich)

    TOP TEN

    1) Climate change 6) Energy price volatility

    2) Fiscal crises 7) Geopolitical conflict

    3) Economic disparity 8) Corruption

    4) Global governance failures 9) Flooding

    5) Extreme weather events 10) Water security

    • ONES TO WATCH

    • Cyber security [online data /information security]

    • Demographic challenges [age structure/ population growth]

    • Resource security – commodities / energy challenges (volatility)

    • Retrenchment for globalisation [protectionism]

    • WMD [terrorists / geopolitical conflict]

    Interactive website:

    http://www.weforum.org/globalrisks2011


    Becoming resilient a few thoughts years (use template No 2)

    • Using both risk and opportunity to inform your plans

    • Less is more - not quantity of paperwork [key messages and robust conversations] Remove jargon.

    • Up-skill Board Members to use / challenge risk information

    • Not just short term. Think longer term as well.

    • Nobody reads risk strategies. Define yours on one page?

    Management co-ordination

    Escalate if required


    Risk management benefits aka why bother

    now….as I was saying about risk management years (use template No 2)

    Risk management benefits(aka why bother?)

    • Tangible benefits

    • Credit ratings (S&P)

    • Reduce “Total Cost of Risk” incl. insurance

    • Less interruptions / resilience

    • Inspection regimes satisfied (compliance)

    • Industry groups

    • Achieve objectives

    • Intangible benefits

    • Consensus at the Board level

    • Improved communication (down and up)

    • Increased (internal) confidence in mitigation

    • External confidence

    • Focus and prioritisation


    Surviving and thriving years (use template No 2)

    Threats to our resilience

    The resilience of others

    Living with risk?


    1 in 5 year event it will happen to you or your partners
    1 in 5 year event…… years (use template No 2)It will happen to you or your partners

    Capacity issues

    (e.g. flu etc)

    Power cuts

    Flood

    fuel

    Accidents

    System failure

    Partner failure


    Supply chain understanding is a must

    Examples years (use template No 2)

    Employees

    LEVEL 0

    People

    Value creation (production)

    LEVEL 1

    Process

    Physical flow (logistics)

    LEVEL 2 Infrastructure

    Strategic (partnerships)

    LEVEL 3

    Organisation networks

    Regulatory,

    Exchange rates,

    Country, region issues

    LEVEL 4

    External environment

    Supply chain understanding is a must

    * Derived from Cranfield University – Supply Chain Risk study


    Quick exercise1

    Quick exercise


    Be prepared
    Be prepared years (use template No 2)

    • Understand and manage your supply chain – they fail – you fail

    • Robust method for managing a crisis (how, decision making, recording, communicating)

    • Understand your key priorities within your organisation (what must you keep going versus areas you can stop)


    Surviving and thriving years (use template No 2)

    Threats to our resilience

    The resilience of others

    Living with risk?


    Fundamental defining what risks to live with
    Fundamental - defining what risks to live with? years (use template No 2)

    “The biggest risk you can take is not to take any risks”J.Guardiola {May 2011}

    Requirements for effective delivery

    • Board buy-in / sign-off vital

    • Set clear boundaries for escalation / reporting

    • Set clear expectations down through an organisation

    • Define risks that threaten objectives

    • Define metrics e.g. performance, financial, reputational

    “The amount of risk that an organisation is willing to pursue or retain”[ISO 31000]


    Quick academic exercise
    Quick “academic” exercise years (use template No 2)

    You are going away as a group for a weekend in the Lakes …. Plot your groups appetite for risk (shade the squares where you are prepared to take a risk)

    Catastrophic = Death

    Critical = Loss of limb

    Marginal = broken bone (it will heal)

    Negligible = Scratches

    Very high

    >90%

    High

    31 - 90%

    Significant

    5% - 30%

    Low

    < 5%

    Very Low

    < 1%

    Almost

    impossible

    <0.1%

    Negligible

    Catastrophic

    Marginal

    Critical


    Key messages regarding resilience
    Key messages regarding resilience…. years (use template No 2)

    Embed at the top table!

    Don’t just think short term

    Understand your supply chain

    Tilden Watson CPFA, IIA, MBCI

    Team Leader, Strategic Practice

    Zurich Risk Engineering UK

    Mobile: +44 (0)7730 735 409

    e-mail [email protected]

    Risk appetite can bring focus and set cultural tone


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