Definitions: Risk: The chance or probability of occurrence of an injury, loss, or a hazard or potential hazard.
Risk assessment: The process of assessing the risks associated with each
identified hazard, in order to make decisions and implement appropriate control measures to prevent the hazard from occurring.
Hazard: A condition with the potential to cause injury, illness, or death
of personnel; damage to or loss of equipment or property; or missiondegradation.
Hazard identification: The process of examining each work area to identify the hazards associated with each job or task.
Probability: The likelihood that a given event will occur.
Severity: The degree of undesired consequences.
Introduction :
Risk management can be defined as the identification, assessment, and prioritization of risks followed by coordinated and economical
application of resources to minimize, monitor, and control the probability
and impact of unfortunate events or to maximize the realization of opportunities. Risks to a company can come from a wide variety of sources, including financial, natural disasters, intentional acts by employees or outside
personnel, employee injuries, and others.
As per BS ISO 31000:2018 Risk Management – Guidelines :
(a) Risk management is an integral part of all organisational activities.
(b) A structured and comprehensive approach to risk management contributes to consistent and comparable results.
(c) The risk management framework and process are customised and proportionate to the organisation’s external and internal context related to its objectives.
(d) Appropriate and timely involvement of stakeholders enables their knowledge, views and perceptions to be considered. This results in improved awareness and informed risk management.
(e) Risks can emerge, change or disappear as an organisation’s external and internal context changes.
Risk management anticipates, detects, acknowledges and responds to those changes and events in an appropriate and timely manner.
(f) The inputs to risk management are based on historical and current information, as well as on future expectations. Risk management explicitly takes into account any limitations and uncertainties associated with such information and expectations. Information should be timely, clear and available to relevant stakeholders.
(g) Human behaviour and culture significantly influence all aspects of risk management at each level and stage.
(h) Risk management is continually improved through learning and experience.
Risk Management Process :
In the modern world, risk management has become a harsh reality. Over the years, organizations have found out that their operations and even their entire existence can be threatened due to external events. Hence, there is no point in going by hoping that adverse external events will only affect other organizations. Over the years, there has been a constant increase in the number of resources that are being devoted to the risk management process. In this article, we will have a closer look at what the risk management process is and how it enables the biggest organizations in the world to effectively manage their risk.
The Steps in the Process
1. Hazard identification
2.Hazard assessment
3. Developing Control Measures
4.Decision making
5. Implementation
6. Supervise and evaluate
1. Hazard Identification :
Hazards are found in all environments and in all situations. Hazards are identified through experience, historical data, intuitive analysis, judgment, standards, brainstorming, and a large variety of other means and methods.
Hazard identification is, without a doubt, the most important step, in the
risk management process. Hazard identification is a continuous process and should be repeated throughout the work period.
The specific method of hazard identification will change from site to site and from task to task. However, the basic process to systematically identify hazards in the workplace includes the following:
• Identify specific work areas;
• Review previous documents or data involved in the operation to
determine if prior injuries or accidents have occurred as a result of
this task;
• Conduct an onsite, visual inspection of the work area;
• Determine the individual job tasks of individuals;
• Break the individual job tasks into steps;
• Analyze each job task, and identify the hazards or potential hazards
involved in performing these tasks.
2. Hazard Assessment:
Once all known hazards have been identified, they must be assessed in terms of their probability and severity to determine the risk level of one or more of the hazardous incidents that can result from exposure to the hazard.
In this step of the process, the hazards are assessed individually. This process is systematic in nature and uses charts, codes, and numbers to present a methodology to assess probability and severity to obtain a standardized risk level.
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Probability :
Probability is the likelihood of an event actually occurring. This is a subjective estimate of the probability, given the information that you know. The probability levels estimated for each hazard are based on the job or project being performed at the time. There are five levels of probability that we will use in our assessment of the hazards. They include the following ratings:
frequent, likely, occasional, seldom, and unlikely.
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Severity:
a risk assessment of both the probability and the severity of the hazards using a ranking system of extremely high risk, high risk, moderate risk, and low risk.
Once all hazards have been identified and a risk assessment has been performed on each hazard, the highest level of risk will determine the overall risk assessment.
3.Developing Control Measures
in this phase of the risk management process, it is necessary to develop controls to reduce the level of risk posed by the hazards. After assessing each hazard, supervisors and managers develop one or more controls that either eliminate the hazard or reduce the risk of a hazardous incident.
Some examples of control measures include the following:
1. Engineering or designing to eliminate or control hazards;
2. Avoidance of identified hazards;
3. Limiting the number of personnel and the amount of time they are
exposed to hazards;
4. Providing protective clothing, equipment, and safety devices;
5. Providing warning signs and signals.
4. Decision making :
The risk decision is determining if the risk is justified.
The supervisor or manager responsible for the project must compare and
balance the risk against the benefits. If the residual levels are too high,
then the senior supervisor or manager on the project may elect to do one
of the following:
• Add additional control measures to further reduce the risks;
• Limit the scope of work, which eliminates the high-risk tasks;
• Make the decision to discontinue the project.
5. Implementation :
We must ensure that controls are integrated into the standard operating procedures, written and verbal instructions, and toolbox
talks prior to the beginning of the project or task. The critical check for this
step, with oversight, is to ensure that controls are converted into clear, simple
instructions understood at all levels. Implementing controls includes coordination and communication with appropriate superiors and employees.
6. Evaluate and Supervise :
During project or task preparation, we must ensure that employees understand how to execute the risk controls. In addition, the manager or supervisor of the project or task must continually assess the risks during the operational phase of the project. Methods to supervise and evaluate the effectiveness of control measures include spot checks, inspections, daily reports, and close, direct supervision. After the project or task has been completed, it is recommended that a post-project evaluation, which includes all employees on the project, be conducted. The results of this post-project evaluation, and any changes, should be maintained in the project file, for future use.
Benefits of Risk Management :
The benefits of risk management to an organisation are self-evident in terms of loss prevention and businessdisruption, but there are a number of specific benefits that can be used to support it at an organisational level:
• Increased likelihood of achieving objectives.
• Encouragement of proactive management.
• Improved identification of opportunities and threats.
• Compliance with relevant regulatory requirements.
• Improved governance, stakeholder confidence and trust.
• A reliable basis for decision-making and planning.
• Improved risk control, loss prevention and incident management.
• Effective allocation and use of resources for risk control.
• Improved operational effectiveness and efficiency.
• Enhanced health and safety performance.
