Risk Management Introduction

“Any organization that provides programs to the public has a moral, legal and spiritual obligation to institute appropriate risk management practices for volunteer programs. This is not only the right thing to do; it is legally required under the principle of duty of care.”

Marlene Deboisbriand (past president, Volunteer Canada)

Risk Management is:
  • The process that an organization uses to identify, assess, control, minimize the risks of Bodily Injury or Financial Loss arising from its activities and operations.
  • Discipline for managing the possibility that some future event will cause harm.
  • It provides strategies and techniques to recognize and confront threats or danger.
  • Its Purpose: To avoid, reduce or prevent risk from imposing negative consequences.
What It Considers:
  • Risks at all levels of operations (strategic, operational and project/events)
  • Business objectives, decision making and management framework
  • The entire organization: from the board to senior management, employees, volunteers and members  
 The Risk Management Process:
  1. Establish the context: Why do this?
  2. Identification: What are the risks?
  3. Analysis/evaluation: How much will it cost?
  4. Treatment: What can/should/needs to be done?
  5. Communicate: Who needs to know and when?
  6. Monitor: Review results, adjust where needed


DEFINITIONS                            

Risk

Any impact caused by internal/external situations or events that prevents:
  • Achievement of objectives
  • Delivery of services
  • Carrying out projects or events
Liability

The legal obligation to:
  • Be aware of the losses we cause
  • Compensate those who suffer as a result or consequence of our activities  
Due Diligence
  • Effort made by an ordinarily prudent or reasonable party to avoid harm to another party
  • Failure to make this effort is considered negligence
  • Standard of care imposed by our courts  
Due Diligence (Directors)
  • Duty to act in the best interests of the nonprofit.
  • Must be seen to attempt to anticipate consequences of decisions or actions
  • Obligation to foresee potential risks and take reasonable action to manage them
Negligence
  • Legal concept of fault or who is to blame
  • Means that someone:
    • Failed to do something they should have
    • Did something they should not have
Standard of Care (defined by courts)
  • Whether the danger was foreseeable
  • Was the conduct within acceptable standards?
  • Was an inspection process in effect and used?
  • Did danger exist at an unreasonable time?
  • The ease of preventing the danger  

Other Risk Management Topics

1. Risk Management Introduction
2. Why Risk Management
3. Identifying and Assessing Risk
4. Practical Strategies
5. Communication
6. Monitoring