Major events are unlike any other business. They attract considerable media attention; draw sizeable investment from Government and/or the private sector; involve a mass gathering of participants; contain a non-negotiable start date; and are one-off, without the benefit of continuous improvement.
All this means that major events are exposed to a unique set of risks involving safety, security, legal, financial, environmental, project-based and, most importantly, reputational risk.
Preparation is essential
Risk management for major events must start early. This ensures that all essential event risk management criteria are set in place. Considerations include budget allocation, contract details, management systems, governance, risk, compliance and accountability structures.
Reliance Risk provides event specific services to assist major event organisers:
* Event Risk Management Plans - covering event context, risk registers, roles and responsibilities and insurance certificates.
* Event Safety Plans - including risk assessments, contractor safety and emergency management.
* Event Operating Plans - including detailing venue relationships, event team organisational structures, functional area suppliers, and event delivery plans.
* Event Risk Officers - provision of an event safety and risk on-site auditor and post incident loss investigator for events.
* Operational readiness - scenario planning, readiness inspections, desk-top exercises and simulations.
* Verification - audit of event risk management or crowd management plans.
* Crowd capacity estimates - we work with venues to establish appropriate crowd capacity estimates.
Reliance Risk Projects
Reliance Risk has a wealth of experience in major event planning in both risk, safety, security and operations, providing the right skills set to suit each client’s needs.
* Ocean Swims - Event Risk Assessment for the 2008 Cole Classic at Manly.
* Public Arts Exhibitions - Event Risk Management Framework and Operational Readiness Inspections; Sculpture by the Sea Bondi (2007) and Cottesloe (2008).
* Australian Tennis Open (2008) - Verification audits of Event Risk Management Plans.
Tuesday, February 3, 2009
Tuesday, January 20, 2009
Confusion over Risk Terminology
Often people in the sporting, venues and events industries confuse risk management terminology. Some commonly confused terms include:
* safety with risk – risks associated with personal injury (safety risks) often get confused with risks which are threats to achieving objectives in terms of likelihood and consequence.
* hazards with risks – hazards are typically the cause of a risk. In safety they may be a form of latent energy source causing injury. They get confused with the chance (likelihood) of a particular consequence occurring.
* risk management with risk assessment – the whole process of establishing the process, risk identification, analysis, selection of controls, monitoring, consultation and communication can get confused with the assessment phase of risk management which includes only risk identification, analysis and selection of controls
* risk assessment with risk analysis –risk assessment is the identification, assessment and selection of controls being confused with only the phase that establishes the likelihood and consequence of risk and compares the result against an acceptability criteria
* inherent risks with residual risk – inherent risks reflect the level of risk before controls are finally implemented. They get confused with the level of risk after controls are implemented. Technically, there can be three levels of risk:
1. inherent risk – the level of risk with no controls
2. gross residual risk – the level of risk with current controls
3. net residual risk – the level of risk once additional controls are implemented
* preventative controls with preparedness controls – preventative controls tend to prevent a risk from occurring, while preparedness controls tend to mitigate a risk’s impact
* most foreseeable risks with worst case scenario risks – most foreseeable risks are that are more likely to occur and that usually have lower consequences, rather than worst case risks which are, by their nature, rare events with catastrophic consequences
From our experience many of these terms get used interchangeably by different people within the same organisation. When there is no consistent agreed terminology, the subsequent confusion can detract from efforts to implement risk management across the company and negatively influence the risk culture. To address this, some organisations develop a Risk Management Framework. Such a document helps to define terms, methods, processes, policies, structures, roles and responsibilities. By doing so, this clarifies to the entire organisation how risk is to be managed and communicated effectively across the business.
~ Reliance Risk,Event Risk Management specialists
* safety with risk – risks associated with personal injury (safety risks) often get confused with risks which are threats to achieving objectives in terms of likelihood and consequence.
* hazards with risks – hazards are typically the cause of a risk. In safety they may be a form of latent energy source causing injury. They get confused with the chance (likelihood) of a particular consequence occurring.
* risk management with risk assessment – the whole process of establishing the process, risk identification, analysis, selection of controls, monitoring, consultation and communication can get confused with the assessment phase of risk management which includes only risk identification, analysis and selection of controls
* risk assessment with risk analysis –risk assessment is the identification, assessment and selection of controls being confused with only the phase that establishes the likelihood and consequence of risk and compares the result against an acceptability criteria
* inherent risks with residual risk – inherent risks reflect the level of risk before controls are finally implemented. They get confused with the level of risk after controls are implemented. Technically, there can be three levels of risk:
1. inherent risk – the level of risk with no controls
2. gross residual risk – the level of risk with current controls
3. net residual risk – the level of risk once additional controls are implemented
* preventative controls with preparedness controls – preventative controls tend to prevent a risk from occurring, while preparedness controls tend to mitigate a risk’s impact
* most foreseeable risks with worst case scenario risks – most foreseeable risks are that are more likely to occur and that usually have lower consequences, rather than worst case risks which are, by their nature, rare events with catastrophic consequences
From our experience many of these terms get used interchangeably by different people within the same organisation. When there is no consistent agreed terminology, the subsequent confusion can detract from efforts to implement risk management across the company and negatively influence the risk culture. To address this, some organisations develop a Risk Management Framework. Such a document helps to define terms, methods, processes, policies, structures, roles and responsibilities. By doing so, this clarifies to the entire organisation how risk is to be managed and communicated effectively across the business.
~ Reliance Risk,Event Risk Management specialists
Risks to Events and Venues from the Current Economic Crisis
So how will the current financial crisis impact upon venues and major events industry in Australia? Clearly the current situation represents one of the most significant emerging risks to these industries experienced in recent times.
Revenues
Firstly, the falling exchange rate will make it less attractive for major US and European artists to tour Australia if our currency continues its current rapid slide. Sponsors of major events and public venues will become more selective in terms of their marketing spend and this will flow on to a reduction in revenues for sponsored entities. If the economic downturn continues towards a global recession, unemployment will increase and the public will have less disposable income to spend on discretionary items such as concert and major event tickets.
Expenses
As the credit crisis worsens across the financial sector, more of the insurance industry is likely to be affected. The loss of one of America’s largest insurers, AIG, shows the potential that the crisis presents to the insurance sector. As insurer profits diminish, insurance premiums will likely increase, given the current point in the insurance cycle.
Risk-Based Approach
The instinct for sports, venues and event organisers may be to batten down the hatches and cut costs. It is in fact, a time to review the organisation’s risk profile and manage risk effectively. Your organisation may have to take on more risk in a market that is shrinking. That is, assessing and mitigating the organisation’s financial exposures and liabilities while maximising opportunities presented by the changing economy. All this while maintaining compliance standards and continuing to differentiate your organisation’s brand and reputation from competitors. A tough ask but an important one!
In this environment, all businesses must fight harder to win every dollar and make a more concerted effort to keep every dollar that they have. Prudent risk management practices are the key.
For more information on Risk please visit Reliance Risk
Revenues
Firstly, the falling exchange rate will make it less attractive for major US and European artists to tour Australia if our currency continues its current rapid slide. Sponsors of major events and public venues will become more selective in terms of their marketing spend and this will flow on to a reduction in revenues for sponsored entities. If the economic downturn continues towards a global recession, unemployment will increase and the public will have less disposable income to spend on discretionary items such as concert and major event tickets.
Expenses
As the credit crisis worsens across the financial sector, more of the insurance industry is likely to be affected. The loss of one of America’s largest insurers, AIG, shows the potential that the crisis presents to the insurance sector. As insurer profits diminish, insurance premiums will likely increase, given the current point in the insurance cycle.
Risk-Based Approach
The instinct for sports, venues and event organisers may be to batten down the hatches and cut costs. It is in fact, a time to review the organisation’s risk profile and manage risk effectively. Your organisation may have to take on more risk in a market that is shrinking. That is, assessing and mitigating the organisation’s financial exposures and liabilities while maximising opportunities presented by the changing economy. All this while maintaining compliance standards and continuing to differentiate your organisation’s brand and reputation from competitors. A tough ask but an important one!
In this environment, all businesses must fight harder to win every dollar and make a more concerted effort to keep every dollar that they have. Prudent risk management practices are the key.
For more information on Risk please visit Reliance Risk
Monday, December 15, 2008
The Ben Cousins Saga - A perfect example of Risk versus Reward in Sport
If risk is the chance of receiving a benefit but potentially a loss, then the Ben Cousins saga is a classic example of risk and reward. The challenge for AFL club Richmond, is to balance the chance of loss with the chance of achieving a gain.
As Cousin’s options for clubs in the AFL have dwindled throughout 2008, Richmond now appears to be offering the Brownlow medallist a lifeline; but the risks are high.
What is the chance of the reformed drug addict reoffending and the potential damage to the club’s brand, reputation and balance sheet through loss of ticket sales, membership and sponsorships? It was only 2005 when the Victorian Transport Accident Commission ended a long standing relationship and sponsorship with the Richmond Club following a drink driving incident involving a Richmond player. It was reported to have cost the club in excess of $500,000 per year.
The opportunities that Ben brings to the club are however considerable. A Brownlow medalist, seasoned midfielder and big potential crowd draw card are obvious. He could add considerable financial value to the club and its brand, if he remains ‘clean’. Onerous drug testing procedures imposed by the AFL and the club may be tolerable depending upon the club’s risk appetite and effectiveness of these control measures.
A risk-based approach to financial decision making can help sporting clubs make decisions about alternative courses of action. Risk management is not just about compliance with standards and the law, but is about minimising threats and capitalising on opportunities within an agreed framework.
For more information on event risk management - contact Reliance Risk.
Tuesday, December 9, 2008
Risks to Events and Venues from the Current Economic Crisis
So how will the current financial crisis impact upon venues and major events industry in Australia? Clearly the current situation represents one of the most significant emerging risks to these industries experienced in recent times.
Revenues
Firstly, the falling exchange rate will make it less attractive for major US and European artists to tour Australia if our currency continues its current rapid slide. Sponsors of major events and public venues will become more selective in terms of their marketing spend and this will flow on to a reduction in revenues for sponsored entities. If the economic downturn continues towards a global recession, unemployment will increase and the public will have less disposable income to spend on discretionary items such as concert and major event tickets.
Expenses
As the credit crisis worsens across the financial sector, more of the insurance industry is likely to be affected. The loss of one of America’s largest insurers, AIG, shows the potential that the crisis presents to the insurance sector. As insurer profits diminish, insurance premiums will likely increase, given the current point in the insurance cycle.
Risk-Based Approach
The instinct for sports, venues and event organisers may be to batten down the hatches and cut costs. It is in fact, a time to review the organisation’s risk profile and manage risk effectively. Your organisation may have to take on more risk in a market that is shrinking. That is, assessing and mitigating the organisation’s financial exposures and liabilities while maximising opportunities presented by the changing economy. All this while maintaining compliance standards and continuing to differentiate your organisation’s brand and reputation from competitors. A tough ask but an important one!
In this environment, all businesses must fight harder to win every dollar and make a more concerted effort to keep every dollar that they have. Prudent risk management practices are the key.
Marketing applied to Event Risk Management and Enterprise-wide Risk Management in Sports, Events and Venues
For many venue managers, event organisers and sports administrators, the marketing managers are the rain makers; the creative ones that generate the ideas and win the business. For operational staff responsible for implementing these ideas, the marketing managers are sometimes perceived as the ones who create the risks which they have to manage. Yet every part of the business has risk and marketing managers of venues, events and sports have many strategic risks which can impact their success.
If the five basic steps of successful marketing are:
In each case there can be threats to achieving these strategic objectives. For example, a marketing campaign that raises awareness but fails to connect with the purchaser’s needs, is likely to fail. In the same way, a marketing campaign that arouses interest but then expects to secure large scale purchases or repurchasers without a trial and single purchase, is also unlikely to succeed.
The list of possible threats and indeed opportunities to any marketing campaign are an important consideration when combing marketing in event management, venue management or sports administration with Event Risk Management or Enterprise-wide risk management (ERM). These represent some of the terms of reference for identifying the marketing related risks, and are those which should be considered, documented and mitigated by the marketing manager.Contact Us
Incident Reporting: An Important Feature of Event Risk Management
Notifiable Incidents
We all know incidents should be reported and recorded. OHS legislation in every state has requirements for alerting the regulator when ‘Notifiable Incidents’ have occurred.
Civil Action
Accurate and timely reporting and recording of incidents can also be useful in potential claims management, where incidents are potentially serious enough that they may result in civil action against your organisation. Where serious incidents do occur, it is a good idea to call your legal counsel before conducting an internal investigation, as they can advise as to how best utilise ‘legal privilege’ when documenting causes of such incidents.
Near Misses
It is also useful to document near misses. Near misses can be a very good indicator of the potential for more serious accidents before they occur. Following research conducted into industrial accidents in the 60’s and 70’s by the ‘father’ of Loss Control, Dr Frank Bird; a ratio was developed that is now well regarded in safety risk circles. It is known as:
It suggests that for every serious incident, injury or fatality; there are 10 minor incidents, 30 property cases of property damage or loss, and 600 near misses. If your event, venue or organisation has experienced a serious incident in the last year, multiply that number by 600. This will give you a rough idea of the number of near misses that may have occurred over the same period. Then check that number against the number of near misses that were actually recorded. If it is significantly lower, then the chances are that there is allot that is going on that is unreported.
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