Regardless of whether you are completing a WHS Risk Assessment, an Operational Risk Assessment or an Emerging Risk Assessment for say, Climate Impacts & Reporting, at some point you will need to decide on the Risk Treatment for your identified risks.
Identifying your hazards and risks is only the first step. From there you apply Risk Descriptions – describing how the risk is or will impact your organisation. Then typically you will assess the Risk for likelihood and consequence, using your Risk Matrix. This assessment allows you to prioritise your risks. The risks that will have the biggest impact or consequence is where you should put your energy and resources. All risks are important, but not all risks were created equal! Focus on the highest priority risks and then check that your Risk Controls are in place and working as intended. This information is then usually collated on your Risk Register.
Risk Treament ......
As part of this process, you should decide on your Risk Treatment option (sometimes referred to as Risk Response) for your identified risks. The purpose of Risk Treatment is to select and implement options for addressing or responding to the risk. Risk treatment options most commonly used include:
- Risk Avoidance – stop the activity altogether to eliminate the risk
- Risk Mitigation – mitigate / minimise the risk by implementing risk controls to lower the likelihood or consequence – you are trying to minimise the probability of the risk occurring and the impact it may have should it occur
- Risk Transfer – pass or share the risk with another entity eg. taking out insurance is the most common form of risk transfer
- Risk Acceptance – retaining the risk but monitoring it with risk controls and reporting
Your Risk Treatment should also align to the Risk Appetite you have for each of these Risks as well as consider your organisational strategy, objectives, obligations and values. Like all things “risk”, it is important to monitor and review your Risk Treatments, to assure yourself that the different risk treatment options you are using remain effective.
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Want Further Information?
The International Risk Management Standard AS ISO 31000:2018 Risk Management Guidelines is a great reference source.
If you would like to discuss your risk management program, reach out so we can have a chat. Have a great day,
Bron
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