Risk management (financial and non-financial)
Successful event organisers manage risk, they focus on goals and safety not just compliance. Effective risk management minimises potential costs and liabilities, and leads to a safer, more enjoyable event.
Risk management plan
A risk management plan should be developed in order to effectively manage risks that may impact upon an event.
The risk management plan should outline all of the steps, policies and procedures that the event organisers are taking in order to mitigate risks.
The risk management plan should include the following sections:
- Introduction (this outlines the background behind the risk management plan including its purpose, the intended audience, and a summary high level approach to risk)
- Roles and responsibilities (details the risk management team and the broader event teams responsibilities in relation to risk management)
- Risk Recording (outlines the structure of the risk register)
- Identification (the risk identification strategies)
- Evaluation (explains the methodology of analysing risks including the risk matrix)
- Mitigation (the strategies that will be utilised to mitigate risk)
- Monitoring and reporting (outlines how risks will be monitored and reported).
Risks should be recorded in a central risk register which enables them to be monitored and managed. The risk register should be a table that includes details of:
- Each risk
- Mitigation / management approach
- Risk tracker
- Comments / actions taken.
In a large event each functional area should maintain its own register which must be consolidated into the central risk register on a periodic basis.
- Risk register / matrix - 100% Pure New Zealand Winter Games 2013 [PDF 2MB]
- Risk Management Plan – Fast5 Netball World Series [PDF 340KB]
The identification of possible risks should take place as part of the feasibility study, however identification of risks is a process that will be ongoing throughout the event. Risks may be either internal or external to the event and each area of an event should be assessed for risk.
Event organisers should request disclosure of key stakeholders risk registers (relating to the event), in order to ensure visibility of the wider risks surrounding the event.
Once risks have been identified they should be evaluated and assessed. There are a number of methodologies that can be utilised to evaluate risks, commonly risks are assessed for:
- Effect (an assessment of the areas that the risk will impact upon if it occurs)
- Likelihood (the probability of a risk occurring)
- Severity (the impact that the risk occurring will have on the event).
Once these areas have been assessed a rating can be given to each risk, this is usually based on a risk matrix that combines the likelihood and the severity.
A high level approach should be developed that will indicate how to mitigate/manage each of the identified risks. The approach will depend upon the risk, however some common approaches to mitigating and managing risks are:
- Testing programmes
- Relationship management
- Detailed planning and preparation
- Contingency planning
- Command and control principles
- Desk top scenario planning
- Insurance programme.
Risk monitoring and reporting
A risk management committee or team should be established and arrangements made to meet on a regular basis. Ideally the team will be made up of both operational and corporate staff.
This team is responsible for monitoring all of the risks, identifying new risks and assessing the progress of the actions on the risk register.
It is important to ensure that specific people are made responsible for the management and mitigation of each risk and deadlines are set for all risk mitigation measures to be put in place.
A member of the team should be made responsible for contacting external agencies (such as the police, local council etc) in order to help identify external risks that may impact upon the event.
A member of the team (usually the leader or facilitator) is responsible for reporting high level risks to management and board.
- Financial Risk Management Template - ITU Triathlon World Championship Grand Final 2012 [DOCX 15KB]
- Monthly Report Template - FIFA U20 World Cup 2015 [DOCX 634KB]
- Ticketing Weekly Sales Report Template - FIFA U20 World Cup 2015 [DOCX 576KB]
- Financial Risk Advisory Sub-Committee Terms Of Reference - 2011 IPC Athletics World Championship [PDF 77KB]