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I. Begin by identifying risks.
Consider what may lead to a loss or an improvement in conditions. The greatest danger in identifying risks is leaving some out. Risk exposures can be divided into four categories:
1 - The value of exposed loss:
• Property (tangible or intangible)
• Net income (revenues and expenses)
• Liability
• Personnel (members and volunteers
2 - Perils that may cause a loss. These are hard to identify since they are most often unexpected.
3 - Determine the entity suffering the loss. You must not forget to consider volunteers, members suppliers, event attendees/ participants.
4 - Consider the financial consequences of loss.
2. Evaluating Risks
How big are the losses that you may experience? Assign a cost to each value exposed to loss. Questions to ask yourself:
• Does everyone share the risk fairly?
• How will I (or others in the community) benefit from the process that entails this risk?
• Can the risk be avoided?
• Have I chosen the risk, or is it being imposed on me without asking me beforehand?
• How much control do I (or others in the community) have over the risk? (2)
3. Risk Control
Controlling risk factors is the most important part of the process. One of the best risk control strategies is to promote a “SAFE” organizational environment. Turn everyone in the organization into a risk manager. Enlist every member in the organization to help look for and reduce exposures.
4. Risk Funding
Risks can be controlled, minimized, reduced but rarely eliminated. Regardless of how effective the risk identification and risk control, unexpected exposures emerge, controls fail to achieve their intended purposes, and losses occur.
5. Continuous Evaluation and Improvements
To be effective your organization must continuously evaluate what it has done and the outcomes of those actions and make adjustments to bring about improvements.
Adapted from Original Source: “Self Motivation” - UT-Knoxville Leadership Guides. Additional Resources:
http://leadership.franklin.edu/LL031.htm (1)
http://www.psandman.com/articles/cma-1.htm (2)
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