Treating Risks In Your Organisation
This is the sixth step in a seven stage process for successfully tackling risk management in your organisation. The first step in the process is communication and consultation and this needs to occur regularly if you are to continue to keep risk management at the front of everyone’s mind.
In this regard you need to continually communicate throughout the process with your organisation and others who may be impacted.
Treating risks involves making a decision about what will be done about the risks faced by your organisation, now that you have identified, analysed and evaluated them; in other words, you know what they are and how they could impact on your organisation.
You should now have a list of priorities; treat the highest risks first.
Treatment should be appropriate to the level of identified risk and generally any cost of treatment should be commensurate with the potential benefits. If you have decided a risk is unacceptable, there are several options for treating it.
Deciding which is most appropriate could be the job of your risk management committee or a designated risk manager.
These are important decisions and weighing them all up will take a while.
An accident is the product of a chain of factors. Consider someone slipping on a wet floor; the accident is the slip. The outcome is the injury. The severity of the injury will be determined by a host of factors, including the age, size, fitness and clothing of the person involved, where and how they land and what they land on, and how long it takes to get medical attention.
Factors contributing to the accident include:
- the area must be accessible
- the person must be walking over that area at that time
- the floor must be wet in the area at that time
It isn’t hard to see that if just one of these factors was removed, the accident may not have happened. You need to think about what actions you can take to avoid these factors in each risk you have identified. For example:
If the person wasn’t there, the accident wouldn’t have happened
Put up a warning sign, rope off areas that are wet
If the floor did not become slippery when it was wet, the accident would not have happened
Choose floor and cleaning products that prevent the surface becoming slippery
The task of actually treating the risks will involve everyone; perhaps you could stage a clean-up day at your premises when dangerous items are moved or replaced and everybody tackles jobs to make the place as safe as possible.
Following this, it will probably be necessary to assign specific tasks to individuals. Ask one of your regular drivers if they can get a road worthy check on the delivery truck, or another person to contact your state government about food handling regulations.
Remember to have a system in place to monitor what everybody is doing, perhaps by holding regular meetings when they can report their progress. It could be the job of your risk management committee to assign tasks and keep informed of the progress of each one, and then report back to your committee.
Good communication is essential because some actions will take longer than others and different tasks will involve different people. For example, Finance Manager will have to approve any spending to buy a new heater or fix the tiles on the roof of the office.
So how do you decide the best way to treat a particular risk
Consider these factors:
The balance between risk and benefit
You may be able to avoid the risk of truck accidents, for example, by using sub-contract carriers but this may substantially reduce the level of customer service offered by your organisation. Advanced driver training using a simulator and a skid pan may reduce the risks to acceptable levels.
The balance between risk and cost or convenience
You may be able to reduce the risk of falling down stairs by moving to a new building, but that could divert all your funds away from more important work. Putting up handrails, warning signs and non-slip strips may lessen the risk.
Remember that your liability if something goes wrong is going to be affected by whether or not people think that you’ve done all you reasonably could to avoid it.
Courts do however take into account what is reasonable and practicable for an organisation to implement. Not putting up a sign to warn people of a slippery surface because it costs $10 is a lot different from having to resurface an entire premises at a cost of $20,000.
The context of the organisation would be taken into account. As with all of the steps in risk management it is important to document these decisions.
Options for treating risk include:
Avoiding the Risk
The best thing you can do is to eliminate the risk completely. Fix what you can fix. This could mean removing trip hazards on the floor in the corridor, disposing of dangerous items or changing the way your organisation operates so a potential risk is avoided altogether.
Reducing the Risk
Look at alternative solutions that reduce risk. Initially focus on “industrial” solutions that do not require people to change their behaviour, such as improved lighting, safety barriers and resurfacing. Solutions such as rules, policies or training can then be looked at to reduce risk. Other options such as protective equipment can also assist.
Risk reduction strategies can reduce the frequency or severity of the losses resulting from a risk, usually by changing operations to reduce the likelihood of a risk, reducing the resulting damage if the risk does occur, or both.
There is a logical order to follow when looking for ways to reduce risk.
Often a combination of these will be needed.
Replace something that is hazardous with something less hazardous. Change the bald tyres on your delivery truck, replace that 40-year-old heater, get a new doormat with non slip backing.
Apply an engineering solution to minimise risk. For example, fit flashing lights in areas where forklift trucks operate, put up warning signs, improve lighting in the car park, put carpet on a slippery floor.
Isolate the risk so it applies to less people, less often. Store any dangerous substances where only people who need them, and know how to use them safely, will have access, or use an enclosed spray booth for spray painting.
Apply administrative measures that can reduce risk, such as implementing safe work procedures, policies or rules, rotating staff or training new staff.
5. Personal protective equipment
As a last resort, provide a personal barrier to the risk, such as gloves, helmets, goggles, respirators etc.
Your organisation can take a number of general safety precautions and contingency measures to reduce the risk of an accident, or minimise the losses if something goes wrong.
- Carrying out inspections at the end of each day to ensure all electrical appliances are turned off, doors and windows are locked and everything is where it should be.
- Making a list of key contact numbers in case of emergency – keep it handy Keeping a list of contact numbers for staff members or clients in case of emergency
- Keeping vital information stored on computer on “back-up disks” off the premises
- Cleaning out gutters, down pipes and drains each summer
- Familiarizing your staff with the location of the mains service isolation switches and valves for electricity, gas and water
The best way of reducing, and hopefully avoiding, the risk of harm to your clients and your organisation that may be caused by staff is to ensure you have staff who aren’t going to do the wrong thing.
This can be achieved by screening. Screening is a sensible process that is designed to find out if a prospective employee is suited to your organisation.
Effective screening is required by law in some industries and occupations and will also protect your existing staff, as well as members of the public that you come into contact with. Most people do not object to screening (even police checks) and it is better to find out now than wait until something goes wrong before discovering a staff member could have been seen to be a potential danger.
Screening involves five steps:
- The position description
- Application form (check references)
- Police records check – if appropriate
Transferring the Risk
If you’re not able to remove or substantially reduce the risk;some activities such as high rise steel erection are inherently risky, you may be able to shift the burden of the risk on to someone else’s shoulders.
You may be able to hire subcontractors or share the job with another organisation.
Another way of transferring risk is to ask people to sign a waiver before they undertake activities with your organisation. However, it is important to realise that waivers are not an excuse or protection for people or organisations that act in a negligent manner. And a waiver does not relieve your organisation from its duty of care to whoever signs it.
A waiver is valid only if all the possible foreseeable risks have been fully explained and that everything has been reasonably done to eliminate, minimise or control the risk. A waiver works only to cover inherent risks and does not cover negligence or excuse an organisation’s failure to act when it could or should have. This area is a legal minefield in itself and waivers tend not to hold much credence in courts.
However, it does make people think twice about suing if they have signed something saying that they were aware that they are participating in an activity and have been made aware of all the possible risks that activity could possibly entail.
Similarly, disclaimers – statements about what you’re accepting responsibility or not accepting responsibility for – also do not excuse you from your duty of care. Putting up a sign saying that you are not liable for people slipping on the rug is not a protection if you have acknowledged that the rug is dangerous, have had numerous complaints and still not done anything to remove the danger.
It is worth noting that the topic of waivers is currently under review and legislation in relation to waivers is being amended in some states.
You may wish to check with your local legal advisor to ensure that you are kept informed.
Insurance is the most common method of risk transfer. Unfortunately, a risk management program cannot create 100 per cent protection from risk – it is a tool to reduce and manage risks, not eliminate them. It is essential that your organisation has relevant insurance policies to protect people working in or on behalf of that organisation.
Insurance policies you should include:
- Property insurance (to cover damage to your premises and property from fire, storm, accidental damage or theft)
- Public liability insurance (to protect your organisation against negligence claims made by a third party resulting from bodily injury or property damage arising out of the operation of your organisation’s business)
- Directors and officers liability insurance (to protect individuals from claims resulting from acts of negligence)
While your risk management program aims to reduce the chance of accidents happening, there will be times when things go wrong. It is important that you have procedures in place to deal with emergencies if they arise.
Ask these questions:
- Do you have a first-aid kit Is it maintained Do people know where it is and how to use it
- Are staff trained in first-aid and emergency procedures
- Do you have an evacuation plan Do people know what it is Do you practice it
- Do you have contact numbers for emergency services handy
You may not be able to prepare for every eventuality, but you will be able to deal with unforeseen emergencies much easier if procedures are already in place. For example, if you’ve planned for a flood and you get a fire, at least you will have an evacuation plan in place.
Remember, the extent of your liability is determined by whether you have done all you reasonably could in the circumstances.
Documenting this Step
As with all steps in the risk management process, it is important you keep records of what decisions you have made about treating risks, what actions need to be performed, by who, and what deadlines or criteria you have set for making sure they get done properly and on time. This can be done using a risk register.
While all care has been taken in the preparation of this material, no responsibility is accepted by the author(s), Cornstalk Software P/L or its staff, for any errors, omissions or inaccuracies. The material provided in this document has been prepared to provide general information only.
It is not intended to be relied upon or be a substitute for legal or other professional advice.
No responsibility can be accepted by the author(s) or Cornstalk Software P/L for any known or unknown consequences that may result from reliance on any information provided in this publication
- Analysing Risks In Your Organisation
- Communicating Risk Management To Your Organisation
- Establishing A Context For Risk Management
- Evaluating Risks In Your Organisation
- Identifying Risks In Your Organisation
- How to use bottlenecks in your business to help you write effective standard operating procedures (SOP)
- SOP Software to help you manage your standard operating procedures (SOP)
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