risk management assignment

8/2/2019 Risk Management Assignment

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Table of Content

No Title Pages

1 Risk Management Committee 2

2 Risk Management Process 3

3 Risk Identification 3

4 Risk Measurement 7

5 Selection of Risk Management

Technique

10

6 Risk Reporting and Monitoring 12


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Risk Management Committee

a) PositionDirectorSee Choong Leong

Vice directorLim Bing Huang

SecretaryNg See Kai

TreasurerSi Mingshan

b) Objective Establish a Risk Management Committee to oversee the Risk Management process as a

whole.

c) Role The Risk Management Committee advises the Universiti Utara Malaysia on risk

management, and submits its annual report to HEA (The University Executive Committee).

To oversee the Risk Management process of the University as a whole. To recommend an appropriate risk appetite or level of exposure for the University. To ensure compliance with government or relevant guidelines. To identify and quantify fundamental risks affecting the University, and ensure that

arrangements are in place to manage those risks.

To ensure that extreme risks are adequately dealt with in disaster recovery or businesscontinuity plans and these plans are up to date and regularly tested.

To help embed a risk management culture into a major decisions, through risk education,high level controls and procedures.

To identify and consider major decision affecting the universitys risk profile or exposure. To recommend to HEA (The University Executive Committee) a suitable risk management

policy for the University.


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Risk Management Process

Significant risks are identified, ranked, monitored, and have appropriate controls. Where therisk appetite, probability or impact changes, or where the controls are found to be inadequate,

they will be enhanced accordingly.

Risk Management has and will continue to be embedded into the strategy, culture andoperations at the University, within a framework that links strategic plans, priorities, risks,

internal controls, audit strategy and performance management.

Risk Identification

Risk identification is generally considered to be the most difficult step in the risk management

process. In the process of identifying risks, a business entity is able to learn about the areas

where it is exposed to risks in order for it to develop information on the sources of risks,

hazards, perils and loss exposures. A strategic approach to risk management depends on

identifying risks against key universitys objectives. Operating within this framework helps to

ensure a consistent approach across the university and enables a clear structure to be established.

a) Finance Inadequate government funding

University failure to adequately government fund, Evaluation of over 50 projects in

university showed that around 25% of the projects scored low on community

participation and were compromised by inadequate government funding and weak local

health systems.

Inadequate Health Economic Unit fundingIt is commonly believed that economic evaluation is hostile to health promotion and that

the requirement for health programs to be cost effective will result in a distortion in the

allocation of funds towards programs that can demonstrate short-run benefits as defined

by inadequate outcome measures.

Poor financial planning


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Having sufficient capital is essential for the survival and prosperity of the universitys

operation, and is a primary indicator of your financial' health. It is important to create a

high-quality financial plan to attract and secure the right type and amount of funding

that needed to make financial planning successful. Lacking of contingency plan may

result in poor financial planning also. Crime loss exposures

Despite the impact of the actual property loss, there are potential liability losses

resulting from criminal acts by employees or others directed or allowed to commit

crimes on the university assets. The starting point for analyzing and controlling the loss

is determining the function of the key employee and the resulting loss severity. Fidelity

losses result from employee dishonesty, robbery and burglary committed on insured

premises and cheque forgery.

Failure to manage pension costsFailure to manage pension costs identified as their number one concern the economic

risk of facing higher than expected pension costs. Among sponsors, 93% identified

accounting risk and the balance sheet volatility created by the difference between the

reported cost of pensions on the company's books and the real cost of pensions

provision. It is because of this separation of powers that many sponsors fail to manage

pension risks at all.

b) Academic Failure to articulate academic priorities

Articulating problems of living, personal, social and global that unable the university to

attract funding, new students, staff in order to articulate academic priorities.

Failure to recruit or retain academics and other senior staffThey indicated that they have difficulty recruiting staff at the same time as some of them

are losing those they have. Most of whom were of the rank of senior lecturer have, forexample, resigned in the last three years, mostly to take up positions with local and

international organizations outside of academia. In those departments where there is no

significant attrition, the problem of recruitment is nevertheless a reality. They cannot

compete with other institutions because, as one senior lecturer intimated, This is a


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departure from the past where at the lecturer level salaries are very high, and markedly

better than those available in both the public and private sectors.

c) Governance and Compliance

Inadequate governance structureInadequate governance of organizational networks and the impact of governance on

network effectiveness. Three basic models, or forms, of network governance are

developed focusing on their distinct structural properties. Propositions are formulated

examining conditions for the effectiveness of each form.

Failure in research conductThey might faces the risk of misconduct in research such as fabrication, falsification,

plagiarism, or other practices that seriously deviate from those that are commonly

accepted community for proposing, conducting, or reporting research. They might fail to

oversee and facilitate the conduct of ethical research.

d) Administration Failure to manage or develop estate

They might faces the risk of unable to manage and analyze complex data, fail to

communicate effectively, bad team leadership; poor time management; the use of

information technology and unable to apply theory to its daily practice. They might

exposed to the risk of unable to clearly define and properly document the contractual

relationship, rights and obligations of the respective parties involved in the real estate.

Failure to provide adequate ICT systems or infrastructureThey may unable to provide adequate ICT infrastructures and the construction of new

buildings to accommodate the ever-increasing student number. They might also faces

lacking computer, outdated equipment and fail to satisfy the student needs. This might

give detrimental impact on research, teaching and administration. Failure to provide adequate student administration

The risk of bad service might exist and this might damage universitys reputation.

University might face the risk of being complain by the customer of its caf regard the

unreasonable food price and the service attitude of the hawker. Bad condition of the


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hostel in university, the breakdown of university official website will also become a

questionable topic by students.

e) Health and Safety

Failure to manage Health and Safety issueUniversity exposed to hazards in relation to works at construction sites such as power

access equipment, ladder, roof work, manual handling, plant and machinery, excavation,

fire and emergency, hazardous substances, noise, protective clothing and protection to

public. They might also face the risk of fail to manage the accident which has happened

such as the injury due to the slippery road.

Health and Safety failure on building projectUniversity might suffering from the financial loss arise from accident due to unhealthy

behavior of a student or hazardous condition in the campus. Disease and disability

resulting from unhealthy habits like these impose enormous costs. There is also a

possibility for University to damage its reputation.

f) Fundamental Flood

A flood is an overflow of an expanse of water that submerges land. Flood is a temporary

covering by water of land not normally covered by water. In the sense of "flowing

water", the word may also be applied to the inflow of the tide. Floods can also occur in

rivers, when flow exceeds the capacity of the river channel, particularly at bends or

meanders. Floods often cause damage to homes and businesses if they are placed in

natural flood plains of rivers. While flood damage can be virtually eliminated by moving

away from rivers and other bodies of water, since time out of mind, people have lived

and worked by the water to seek sustenance and capitalize on the gains of cheap and

easy travel and commerce by being near water. That humans continue to inhabit areas

threatened by flood damage is evidence that the perceived value of living near the water

exceeds the cost of repeated periodic flooding.
http://en.wikipedia.org/wiki/Tidehttp://en.wikipedia.org/wiki/Tide


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Risk Measurement

Measuring risks is the second step in the risk management process. In measuring risks, abusiness entity evaluates loss frequency and loss severity and then ranks the risks according to

their importance.

Size of Risk Impact Guide

The Impact guides are only use for guidance, the table below showed the risk rating usually used.

Severity descriptors Possible consequences Examples*

1 - Insignificant No impact

2 - Minor

Negative outcomes from risks

or lost opportunities that are

unlikely to have a permanent

or significant effect on the

Universitys reputation or

performance

Less than


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term but do not threaten the

existence of the institution in

the medium term

consequence

Negative headlines in thenational press

Irreversible injury or death

terrorismmay have the

potential to escalate to very

serious

University financialsystems fail completely andcannot be recovered

5Very serious

Negative outcomes from risks

or lost opportunities which if

not resolved in the medium

term will threaten the existence

of the institution

Financial loss (or loss ofpotential financial surplus)

over 2% of turnover for

consecutive years

Substantial regulatoryconsequence

Sustained negative headlinesin the national press

Closure of major part ofbusiness

Irreversible multiple injuryor death

Major accident due toUniversity negligence

Major fire that prevents asubstantial part of the

University delivering

courses

Collapse in studentapplication numbers

Sustained failure to recruitstaff

Frequency of RiskLikelihood

Descriptor Likelihood

1Very low 2% likely to happen

2Low 5% likely to happen

3Medium 10% likely to happen

4High 20% likely to happen

5Very high 50% likely to happen


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Severity of risk

1Insignificant

2Minor

3Moderate

4Serious

5Very serious

Total risk score guide (frequency x severity)

Descriptor Guide

06 Low Low level of risk, should not require much attention but should be reviewed at

least annually

712 Medium Medium level of risk, should be monitored and reviewed annually as a

minimum, 6 monthly if necessary

1318 High High level of risk, should be constantly monitored and reviewed quarterly or 6

monthly.

1920 Very high Top level of risk, should be constantly monitored and reviewed monthly.


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Selection of Risk Management Techniques

Selection of risk management techniques is the third step in the risk management process. Aftermeasuring the risks, it is able to rank the risks according to their importance and select

appropriate techniques to manage these risks.

Three major types of risk management technique are risk avoidance, risk control (lossprevention and loss reduction) and risk financing (risk retention and risk transfer).

Risk area Code Risk Frequency Severity Risk

score

Measures

Finance F1 Inadequate

government

funding

High Serious 15 Lobbying, cost control

(recruitment protocol,

budget savings, capital

moratorium)

F2 Inadequate Health

Economic Unit

funding

Moderate Serious 12 Costing policy, monitoring

of trends, research health

economic unit

F3 Poor financial

planning

Low Moderate 9 Financial planning system,

longer-term planning

F4 Crime loss

exposures

Low Moderate 10 Criminal activities report,

managerial controls,

procedural controls

F5 Failure to manage

pension costs

High Serious 16 Review financial

statement, planning related

to proposals

Academic A1 Failure to

articulate

academic

priorities

Moderate Serious 11 Planning process, work of

academic department,

planning of new

arrangement

A2 Failure to recruit

or retain

academics and

other senior staff

Moderate Moderate 10 Research on teaching and

lecturing


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Governance

and

compliance

G1 Inadequate

governance

structure

Moderate Moderate 9 Review by the executive

committee

G2 Failure in

research conduct

Moderate Moderate 9 Policies, leadership and

trainingAdministr

ation

E1 Failure to manage

and develop

estate

Moderate Moderate 9 Maintenance and

refurbishment programmes

E2 Failure to provide

adequate ICT

systems or

infrastructure

Moderate Serious 13 ICT governance and

strategy


adequate student

administration

Moderate Serious 14 Planned projects

Health and

Safety

H1 Failure to manage

Health and Safety

issues

Low Serious 12 Policies and oversight,

departmental self-

assessments and

inspections

H2 Health and Safety

failure on

building project

Moderate Serious 14 Policies and oversight by

related department,

oversight by individual,

report on accidents

Fundamen

tal

B1 Flood High Very

serious

19 Report on damage of

property, inspections


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Risk Reporting and Monitoring

Final step in the risk management process, which is the reporting and monitoring of risks.Accurate and timely information is needed in order to make good decisions.

A good risk management information system to gather information into a database for furtheranalysis, and to produce reports that meet health economic.

Code Risk Risk technique Consequences Action

F1 Inadequate

government

funding

Loss reduction Inability to carry out planned

activities; possible need for

major change in operations

Continue lobbying

and scenario

planning

F2 Inadequate

Health Economic

Unit funding

Loss reduction Reduction in quality of

education offered unless

funds diverted from other

purposes, in which case

impact on those purposes

Continue lobbying ,

scenario planning,

and preparing for

new agreement and

fee and bursary

arrangements

F3 Poor financial

planning

Loss reduction Inability to carry out planned

activities;

damage to reputation

Planned the financial

activities carefully,

improve the financial

planning system, well

planning on long-term

financial investments

and allocations

F4 Crime loss

exposures

Risk transfer Damaging the financial assets,

loss exposures increase result in

insufficient financial to cover

the loss exposures

Physical controls

include alarms,

security patrols and

cameras. Securely

perform particular

tasks making it

difficult for persons to

commit crimes or

make crime detection

more prompt for an


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example individual

enter through a

security sign-in area

with provided

passwords.F5 Failure to

manage pension

costs

Loss

prevention

Increased costs or requirement

to fund scheme deficits, with

consequent impact on

operations

Continue

investigation of

options

A1 Failure to

articulate

academic

priorities

Loss

prevention

Inability to attract funding,

staff, and students

Prepare new Strategic

Plan

A2 Failure to recruit

or retain

academics and

other senior staff

Loss

prevention

Impact on research, teaching,

student experience, and on

wider operations

Planning for new

arrangements

G1 Inadequate

governance

structure

Loss

prevention

Negative impact on work,

management, and governance

throughout the University;

qualification of audit opinion;

damage to reputation

Improve the

governance structure

with a clear


chart or bar

G2 Failure in

research conduct

Loss reduction Damage to reputation; impact

on operations; loss of funding

Improve the research

conduct, well planned

before conduct a

research

E1 Failure tomanage and

develop estate

Loss reduction Impact on research, teaching,and administration

Update estates strategy


adequate ICT

systems or

Loss

prevention

Detrimental impact on research,

teaching, and administration;

failure to keep up with other

Improve ICT



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infrastructure universities


adequate student

administration

Loss

prevention

Inefficiency and perception of

poor service; damage to

reputation

Work towards

replacement for

administration services

H1 Failure tomanage Health

and Safety issues

Lossprevention

Consequences for health andsafety of staff and students;

financial loss, disruption to

work, damage to reputation

Implanted safety aidsin workplace, study

room, more inspection

to oversight the often

place accident happen

and improve it with

safety equipments

H2 Health and Safety

failure on

building project

Loss reduction Financial loss; reputational

damage; delay to project

Oversight the building

project, cover the

places under

construction to reduce

frequency of accident

happen

B1 Flood Loss reduction Damaging the property, affect

the study life in campus,

damaging the plants, may even

result a drowning cases for

curious teens

Improve the draining

system, alarm the flood

place and evacuate

before it happens


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Analysis by using diagram

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risk management assignment

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