MANAGING BUSINESS RISKS AN OVERVIEW

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MANAGING BUSINESS RISKSAN OVERVIEW

• CSU, Northridge
• January, 2004
• Chris Brady
• University Risk Manager

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WHAT IS RISK MANAGEMENT?

• Risk The organizations exposure to accidental
  loss.
• Management Planning, organizing, Leading and
  controlling.
• Everyone on campus must be a risk manager.

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Classic risk management is no longer adequate
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IN ORDER TO MANAGE RISK EFFECTIVELY YOU MUST

• Understand risks associated with your objective.
• Understand your role as a part of the CSUN Risk
  Management Team.
• Expand your knowledge base of risk management
  principles.
• Take an active role in the risk management effort
  at CSUN.
• Seek creative solutions to risk management issues.

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Why Managing Risk Is Important

• Accountability
• Raises Awareness
• Financial impacts
• Program cuts
• Premiums
• Deductibles
• Claims

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CSUN Insurance Contributions (Premiums)
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CSUN Insurance Contributions (Premiums)
4,169,434
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Benefits of Hands-OnRisk Management

• Increases awareness of objectives
• Puts focus on mission critical objectives
• Clear understanding of responsibility
  accountability
• Improves cross-functional communication
• Creates a sense of TEAM-OWNERSHIP
• Early identification of risks can result in
  mitigation activity that significantly reduces
  exposure

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SIX STEPS OF RISK MANAGEMENT

• 1. Identify and Analyze Exposures
• 2. Analyze Feasibility of Alternative
  Techniques
• 3. Select Method of Risk Control
• 4. Implement Chosen Techniques
• 5. Monitor Results
• 6. Modify Techniques

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STEP 1 Identify Analyze Exposures

• Identification Tools
• Loss History
• Program Outlines
• Annual Budget
• Meeting Agendas
• Purchase Agreements
• Inspection and Maintenance Records
• Contracts and Leases

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STEP 2 Feasibility of Alternative Techniques

• Avoidance
• Transfer of Risk
• Retention of Risk
• Reduce Risk through Loss Reduction Efforts
• Finance Retained Risk
• Define Meaningful Standards and Expectations

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STEP 3 Evaluate Loss Potential

• Evaluation Techniques
• Frequency/Severity of Claims
• Publications/Periodicals/Other Universities
• Political/Litigation Climate
• Anticipate

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MITIGATION OPTIONS

• Control It (prevention detection techniques)
• Share It (co-source warrants guarantees)
• Transfer It (insurance hold harmless contracts)
• Avoid It (process re-design eliminate process)
• Accept It (cost/benefit analysis)
• Residual Risk (Opportunity To Manage)

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STEP 4 Implement Chosen Technique

• Management Support
• Documentation and Notification
• Governing Board Approval for Major Actions
• Develop Policies and Procedures

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STEP 5 Monitor Results

• Compare Actual Results to Anticipated Results
• Consider Environmental Changes
• Keep Records/Documents

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STEP 6 Modify Techniques to Reflect experience

• Document Decision Making Process
• Maintain a Safety/Loss Control Program
• Continue to Monitor Results
• Start over at Step 1 !!!

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CURRENT CHALLENGES

• Changing environment remodel
• Budget issues Circumvent procedures/taking
  shortcuts
• Policies Procedures Clearly defined
• Safety environment Constant changes
• Communication Sharing of information
• Equipment Purchasing Insurance requirements
• Maintain a teamwork philosophy, share
  information, focus on the objective of the
  college and the impact to future programs.

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RISK RELATED ACTIVITIES

• Lab Environment
• Project design testing
• Competitions
• Internships
• Field Trips
• Proper planning, training and supervision for
  these types of activities will significantly
  reduce the risk of loss, damage or injury.

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For Assistance With

• Insurance Issues
• Risk Assessments
• Ergonomic Assessments
• Compliance Monitoring
• Claim Management
• Training Staff Development

Insurance Risk Management at ext. 2401
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Questions Answers