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Qualitative Risk Assessment
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NSW Coal Mining related resources include MDG 1010 Minerals industry safety and health risk management guideline (2011), and MDG 1014 Guide to Reviewing a Risk Assessment of Mine Equipment and Operations (1997). MDG-1014_NSW Dpt Mineral Resources_Guide to Reviewing Risk Assessment of Mine Equipment and Operations_1997.pdf MDG-1010_NSW Dpt Mineral Resources_Minerals Industry Safety and Health Risk Management _2011.pdf -
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Introduction Quantitative risk assessment is one approach to measuring risk. It involves measuring both consequences and likelihoods using numerical scales. These can be expressed as ranges or distributions. Alternative measurement approaches are qualitative and semi-quantitative risk assessment. Examples Quantitative risk assessment techniques need to be carried out using the appropriate units for the risk being measured. For example, the expected frequency of car accidents per thousand kilometres travelled by a driver. Other examples include the mean time to failure of a piece of equipment, expected values of financial returns over a financial year, or cost of repairs per thousand duty cycles. The consequence of risks can also be expressed as a probability distribution, for example, the variance of returns on a financial investment. Another quantitative measure is calculating the value which has a certain probability of occurring for a particular risk. For example, the number of litres which have a 50 per cent chance of leaking out of a particular water pipe over a year. Quantitative methods can also express consequence-based measures such as the probable maximum loss from an investment. These are usually used when there is not enough data to estimate likelihood, or there is uncertainty over which project controls will fail. Risk aggregation Quantitative risk assessment can be used to aggregate values for a group of like risks into a single value as long as they share a single consequence and common units, such as Australian dollars or failures per hour. However, this reduces the amount of data available about each individual risk, which may cause problems in complex systems. Correlations between probability distributions also need to be taken into account to avoid misleading results. For a reliable result, tools such as Monte Carlo simulation should be used to combine distributions. Sources: The content on this page was primarily sourced from: IEC 31010:2019 Risk Management – Risk Assessment Techniques (6.3.5.4)
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Introduction Semi-quantitative risk assessment is one approach to measuring risk. It involves expressing one parameter, such as likelihood, quantitively. The other parameter is assigned a descriptive or numerical ranking. Alternative measurement approaches are qualitative and quantitative risk assessment. Limitations When using semi-quantitative methods, risk engineers and other practitioners should ensure that they provide explanations of how their quantitative calculations were carried out to avoid them being misinterpreted. Like qualitative methods, semi-quantitative methods are only useful to compare risks with a common measurement method, or with the same criteria. They can also be difficult to use in cases where trade-offs between risks need to be measured, or where a particular risk can have both positive and negative outcomes. To combine or aggregate risks, quantitative methods must be used. Sources: The content on this page was primarily sourced from: • IEC 31010:2019 Risk Management – Risk Assessment Techniques (6.3.5.4)
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Introduction Systems thinking is a branch of the complexity sciences which can be readily applied to modern-day risk management. It is also referred to as complex systems theory and systems theory. The purpose of systems thinking is to try to understand how highly integrated and interactive systems operate and apply that knowledge to everyday management situations. Unlike more mathematical complexity sciences such as computational and chaos theory, systems thinking is a practical field, and can be readily understood by most stakeholders. Sources: The information on this page is based primarily on the following sources: Webinar titled ‘An Introduction to Complexity and How it Influences Risk Management’, Session 1', delivered to REBOK community on 30 April 2019 by Warren Black, Principal and Founder, Complexus and Geoff Hurst, Principal, ENGENEOHS
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Introduction Qualitative risk assessment is one approach to measuring risk. It involves using descriptive or numerical ranking scales to classify the potential consequences and likelihoods of each risk. Alternative measurement approaches are semi-quantitative and quantitative risk assessment. Examples One example of a qualitative risk assessment tool is a risk assessment matrix, which defines rating scales for the likelihood and impact of each identified risk, then combines them in a colour-coded diagram to decide which are major, moderate or minor in order to develop an appropriate risk response. A likelihood scale is shown below. And an impact scale for injury at work in the next diagram. In the corresponding risk matrix, a risk with a likelihood of 5 and impact of 5 would be classified as a major risk, while an impact of 3 and a likelihood of 3 would be moderate, and an impact of 3 and likelihood of 1 would be minor. Other examples include: bow-tie analysis probability/consequence matrix decision tree analysis brainstorming Delphi technique structured what-if technique (SWIFT). Sources: The content on this page was primarily sourced from: IEC 31010:2019 Risk Management – Risk Assessment Techniques (6.3.5.4)
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Introduction In Australia, Section 19 of the Work Health and Safety Act requires Persons Conducting a Business or Undertaking (PCBU) to eliminate risks in the workplace, or if that is not reasonably practicable, minimise the risks so far as is reasonably practicable. Hazard identification is the critical first step in an organisation’s risk management approach. This approach forms the basis for subsequent risk assessment, identification of risk controls, and ongoing review of hazards and control measures. Definition A hazard is defined by Safe Work Australia as “a situation or thing that has the potential to harm a person". Examples of workplace hazards include moving vehicles, machinery noise, chemicals, electricity, bullying and workplace violence. Hazard identification is used as a basis for risk assessment, in cases where there is a risk of injury or death when a person is exposed to a hazard. Guidance Managing work health and safety risks is an ongoing process that needs attention over time, but particularly when there are changes affecting work activities. It should also be considered when designing and planning products, processes or places used for work. Hazards generally arise from the following aspects of work and their interaction: physical work environment equipment, materials and substances used work tasks and how they are performed work design and management. Risk identification strategies include: workplace inspections safe design reviews to identify and eliminate hazards and minimise risks is during the design phase consultation with workers and suppliers review of suppliers’ and manufacturers’ product data (safety data sheets) and user manuals reviewing records of workplace incidents, near misses, worker complaints, sick leave, and the results of any inspections and investigations to identify hazards. Sources The content on this page was primarily sourced from the following: Material provided by Peter Flanagan, Capital Insight ISO Guide 73:2009 Risk Management - Vocabulary ISO 31000:2018, Risk Management – Guidelines IEC/ISO 31010:2009, Risk Management – Risk Assessment Techniques AS HB 158—2010, Delivering Assurance Based on ISO 31000:2009 Risk Management Principles and Guidelines
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Introduction Risk is a dynamic concept that is influenced by constantly changing external and internal environments – with project environments typically experiencing the highest rate of change. Therefore, organisations should monitor and review the performance of their risk management process as well as the potential impact of environmental changes. Organisations should also identify emerging risks and monitor changes to the likelihood and impact of identified risks. Keeping track of the effectiveness and adequacy of existing controls, associated risk treatment plans and the management processes for controlling their implementation is also important. Definition ISO Guide 73:2009 defines monitoring as “continual checking, supervising, critically observing or determining the status in order to identify change from the performance level required or expected”. The same reference defines review as “activity undertaken to determine the suitability, adequacy and effectiveness of the subject matter to achieve established objectives”. Further definition and guidance on monitoring and review is provided in: AS ISO 31000:2018, Risk Management – Guidelines (6.6) IEC/ISO 31010:2009, Risk Management – Risk Assessment Techniques (5.6) Guidance HB 158—2010, Delivering Assurance Based on ISO 31000:2009 Risk Management Principles and Guidelines provides a guide to assessing the adequacy of the risk management framework and process. It also describes how to use the risk management process to: develop a risk-based assurance strategy and program plan an assurance engagement report the assurance program design controls. Sources: The content on this page was primarily sourced from the following: Material provided by Peter Flanagan, Capital Insight ISO Guide 73:2009 AS ISO 31000:2018, Risk Management – Guidelines IEC/ISO 31010:2009, Risk Management – Risk Assessment Techniques AS HB 158—2010, Delivering Assurance Based on ISO 31000:2009 Risk Management Principles and Guidelines
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Introduction Because risk is the effect of uncertainty on objectives, it is important to understand the concept of uncertainty. Uncertainty is a lack of certainty about future outcomes, characterised by a lack of knowledge or information about events or circumstances. Definition ISO Guide 73:2009 Risk Management - Vocabulary defines uncertainty as “the state, even partial, of deficiency of information related to, understanding or knowledge of an event, its consequence, or likelihood.” Similarly, HB 203:2012, Managing Environment-related Risk defines uncertainty as “a lack of knowledge arising from changes that are difficult to predict or events whose likelihood and consequences cannot be predicted accurately". Managing Uncertainty Uncertainty cannot be measured in quantitative terms through past models. However, uncertainty can be reduced through systematic efforts to obtain knowledge and informed opinion. Applying an iterative process to improve knowledge – when combined with recognising sources of uncertainty – enhances risk management thinking and can transform the risk assessment process and the selection of risk treatments. Some uncertainty will always remain, and organisations need to be sufficiently resilient to cope with unexpected circumstances. Sources: The content on this page was primarily sourced from the following: Material provided by Peter Flanagan, Capital Insight ISO Guide 73:2009 Risk Management - Vocabulary AS HB 203:2012, Managing Environment-related Risk
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Introduction Establishing the context is necessary to customise the risk management process to meet an organisation's needs and enable effective risk assessment and appropriate risk treatment. Establishing the context involves: defining the purpose and scope of risk management activities, including relevant objectives defining the internal and external context of the organisation defining the risk criteria to be used to evaluate the significance of risks and to support decision-making processes. Definition ISO Guide 73:2009 defines establishing the context as “defining the external and internal parameters to be taken into account when managing risk, and setting the scope and risk criteria (3.3.1.3) for the risk management policy (2.1.2)”. Further definition and guidance on establishing the context is provided in: AS ISO 31000:2018, Risk management – Guidelines (6.3) IEC/ISO 31010:2009, Risk management – Risk assessment techniques (4.3.3) Setting the Context for Risk Assessment For a specific risk assessment, establishing the context should include: confirming the purpose and scope, including identification of: the relevant objectives the decisions that need to be made scope inclusions and exclusions appropriate assumptions and the basis of those assumptions relevant stakeholders and the extent of their influence on, and input to, the risk management process appropriate risk assessment tools and techniques required resources required investigations or research interdependencies with other projects, processes or activities. establishing an understanding of an organisation’s internal characteristics and their influence on the management of risk, including organisational values and culture, governance arrangements, policies and procedures, and decision-making processes identifying significant factors in the external environment that give rise to uncertainty, including the social, regulatory, cultural, physical, financial and political environment; external stakeholders; and key external organisational drivers agreement on the risk criteria to be applied – including consequence and likelihood definitions, method for determining the level of risk, criteria for deciding when a risk requires treatment, the impact of risk timeframes (urgency) and existing risk controls, and how combinations of risks will be taken into account. Sources: The content on this page was primarily sourced from the following: Material provided by Peter Flanagan, Capital Insight ISO Guide 73:2009 AS ISO 31000:2018, Risk management – Guidelines IEC/ISO 31010:2009, Risk management – Risk assessment techniques
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Introduction Documents and records are fundamental for managing risk, safety, and quality. Even with digital advancement and the migration of records to an online environment, managers, risk practitioners and engineers still need to decide the extent of the documentation and records required to manage risk and collect enough information to support the organisation's level of risk appetite. Should things go wrong, conflict is almost always resolved through documentation. The documentation suite in most workplaces can be likened to a swamp. It contains a lot of good information, but it can be murky, making it hard to find what you need. Instead, risk managers should aim for a crystal-clear lake, where you can see right to the bottom, and everything is in its place. Context The risk management basics page outlines a framework for building a risk management solution. The framework includes six components: Governance structure Defined risk appetite Risk based management planning Risk control systems Risk based assurance Risk culture Each of these components has enabling tools attached to it, such as: leadership structure (i.e. organisation chart) risk appetite statement (i.e. policy or vision) risk matrices / heat maps documented risk tolerances, thresholds & limits (i.e. plans or procedures) strategic, business, project management, and risk management plans assurance frameworks, standards, and plans. Other tools used in risk management include: risk registers, bow-tie analyses, layer-of-protection analyses control effectiveness studies. These enabling tools are, by their nature, documents and records. Purpose Documents and records are differentiated by their purpose. Documents (which can be hardcopy or electronic) are typically plans, procedures, or contracts, which in effect tell a person what to do. Documents provide guidance if there is a misunderstanding about what is supposed to be done. Records (which can also be paper-based or electronic), are typically reports, checklists, certificates, registers, or spreadsheets which tell a person what has been done. Records are often the evidentiary output that is relied upon if there is a dispute or misunderstanding about what happened. Effective risk management solutions require both documents and records. Criteria Access to computers and electronic devices has made document and record creation a simple task. However, this can mean that there is little preamble or thought about whether the document or record should be created in the first place. For each document and record, the aspects listed below should be considered and written down, so that there is a common understanding of why the effort needs to be expended in writing and maintaining the document or record: purpose audience level of detail and/or accuracy required length and structure history and source of input information lifecycle (inputs, outputs, usage and storage approval requirements Where the aspects above are unknown, unclear, or disputed, the value of the document or record should be reconsidered, as should the need to create it in the first place. Design process Designing a suite of documents and records for risk management includes the following steps: Define the entire suite of documents and records, before writing any of them List the plans, procedures, reports, registers and tools that will be used Design with the reader or user in mind Layout the content of each document or record in a logical flow for the reader. The design determines if it is worth reading or using Declutter the content Be very sure about the audience of the document or record, and what they will use it for. Be sure of what it needs to do, and stick to that; nothing more, nothing less. Deliver for approval, or address the question: “done, then what?” Understand what approvals are needed and how long they will take Determine the review process, and advise the reviewer or approver of any relevant guidelines that need to be consulted Decide what happens to the document or record after approval. Sources: The content on this page was based primarily on the following sources: Material provided by Susan Jaques, Sage Consulting Solutions
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Introduction The community expects infrastructure to be safe (not harmful) and useful (achieve what it sets out to do). This is based on the idea that prior to committing to an undertaking or project, all those with a vested interest in the outcomes (any duty of care) agree in advance that everything that could have reasonably been done to ensure that the endeavour is successful (and not harmful) is in place. This means that if what is agreed is done and it comes unstuck, recriminations are minimised. It represents a form of social contract between stakeholders that is typically enforceable under common law. Engineering perspective Engineers and scientists are among many in the community who assume that the world is not chaotic and the natural material spacetime universe is governed by the laws of nature. Classically, establishing the laws of nature is what (pure) science strives to achieve whereas engineering applies the understanding of scientific insights for the benefit and convenience of mankind. The laws of nature appear to be immutable in themselves. There is no court of appeal. Whatever happens remains the case despite various human interpretations post event. Mid-air collisions, ship groundings, road smashes, electrocutions, fires and explosions, oil well blowouts, train crashes and building collapses are manifestations of the laws of nature in the physical material spacetime universe. Understanding the laws of nature is therefore vital to all those who directly deal with such matters, notably engineers. Nevertheless, from an engineering viewpoint, it does not matter how brilliant a proposed design might be. If it is not symmetrical with all relevant governance requirements, it will fail. In a sense, this means that engineering due diligence refers to ensuring a sensible (or perhaps arguable) congruence between the laws of nature and the laws of man if matters do go awry. Sources: The material on this page is drawn primarily from the following sources: Robinson Richard M and Gaye E Francis (2019). Engineering Due Diligence (11th Edition). R2A Pty Ltd, Consulting Engineers.
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Introduction Many professional organisations, including Engineers Australia, maintain codes of ethics with which their members are expected to comply. Amongst other matters, the engineers’ code requires that members stick to their area of competence, ensure that those who pay them are considered to be their client, be responsible for their own negligence (in part by having insurance) and to give credit where credit is due. They are also required to turn down unethical incentive payments, or 'kickbacks'. Engineers Australia Code of Ethics The Engineers Australia Code of Ethics in 2010 has four key points summarised below. The Code notes that, if called upon to do so, members are expected to justify any departure from both the provisions and spirit of the Code. Demonstrate Integrity: Act on the basis of a well-informed conscience; be honest and trustworthy; respect the dignity of all persons Practice Competently: Maintain and develop knowledge and skills; represent areas of competence objectively; act on the basis of adequate knowledge Exercise Leadership: Uphold the reputation and trustworthiness of the practice of engineering; support and encourage diversity; communicate honestly and effectively, taking into account the reliance of others on engineering expertise Promote Sustainability: Engage responsibly with the community and other stakeholders; practice engineering to foster the health, safety and wellbeing of the community and the environment; balance the needs of the present with the needs of future generations. Historically, consulting engineers in Australia were bound to this approach. For example, the old Association of Consulting Engineers Australia (ACEA) required that member firms were controlled by directors who were bound by the Code of Ethics. This meant that in the event of a decision between the best interests of the owners and the clients, the clients' interests normally held sway. Members or their firms could be subjected to a disciplinary hearing if they breached the association rules or the Code of Ethics. Sources: The content on this page was primarily sourced from the following: Association of Consulting Engineers Australia (1987). Practice Note: C/9. Amendments to ACEA Rules. (The core requirements for membership are contained in Section 8, and Section 17 notes that disciplinary hearings could result from breaches of association rules or the Code of Ethics) Engineers Australia (28 July 2010). Our Code of Ethics. Robinson Richard M and Gaye E Francis (2019). Engineering Due Diligence (11th Edition). R2A Pty Ltd, Consulting Engineers.
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An Introduction to Complexity and how it influences Risk Management - Session 1
Geoff commented on Susan Olsen's calendar event in REBOK Community Activities
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Session 2 - Introduction to Complexity and how it influences Risk Management
Susan Olsen posted a calendar event in REBOK Community Activities
SESSION 2 WEBINAR - PLEASE NOTE THE EVENT TIME IS 12.00PM TO 1.00PM AEDT - MEMBERS OUTSIDE OF ACT, NSW, VIC & TAS NEED TO ADJUST TIMES ACCORDINGLY Presenters: By Warren Black & Geoff Hurst Description: The fact is our working world is not getting any simpler, only more and more complex. For most, this increased working complexity can be felt on an almost daily basis. Continually evolving technologies, product trends, consumer behaviors, data sets and stakeholder relationships all contribute to a working world which is growing ever more dynamic, unpredictable and systemically co-dependent. Building on this observation, basic complexity theory teaches us that as systemic complexity increases, environmental rationality and predictability decreases - so much so, that at the highest levels of complexity there is wild environmental disorder (chaos). In turn, modern day risk professionals are now faced with a particularly ominous challenge; how to effectively control those disruptive phenomena (risks) known to emerge from within highly inter-connected operating systems, experiencing ever increasing frequencies of change, balancing on the edge of chaos. Join Warren Black and Geoff Hurst on April 30th and May 7th for a series of RES member webinars discussing the concepts of complexity, systems thinking, disruption, emergence, chaos and what it all means for modern day risk management. Most importantly, join us as we collectively aim to tackle the fundamental question; “What qualifies as (scientifically) valid risk management within highly complex, operating environments?” -
An Introduction to Complexity and how it influences Risk Management - Session 1
Susan Olsen posted a calendar event in REBOK Community Activities
untilWEBINAR RECORDING Presenters: By Warren Black & Geoff Hurst Description: The fact is our working world is not getting any simpler, only more and more complex. For most, this increased working complexity can be felt on an almost daily basis. Continually evolving technologies, product trends, consumer behaviors, data sets and stakeholder relationships all contribute to a working world which is growing ever more dynamic, unpredictable and systemically co-dependent. Building on this observation, basic complexity theory teaches us that as systemic complexity increases, environmental rationality and predictability decreases - so much so, that at the highest levels of complexity there is wild environmental disorder (chaos). In turn, modern day risk professionals are now faced with a particularly ominous challenge; how to effectively control those disruptive phenomena (risks) known to emerge from within highly inter-connected operating systems, experiencing ever increasing frequencies of change, balancing on the edge of chaos. Join Warren Black and Geoff Hurst on April 30th and May 7th for a series of RES member webinars discussing the concepts of complexity, systems thinking, disruption, emergence, chaos and what it all means for modern day risk management. Most importantly, join us as we collectively aim to tackle the fundamental question; “What qualifies as (scientifically) valid risk management within highly complex, operating environments?” How complexity influences risk (a complex systems view) - RES EA 30 April 2019 FINAL.pdf -
Thanks Geoff, that's an interesting take on the topic.
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Geoff changed their profile photo
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"Risk Comes from not knowing what you're doing" Raymond Reddington - "The Black List" quoting Warren Buffett: https://www.brainyquote.com/quotes/warren_buffett_138173
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"Risk Comes from not knowing what you're doing" Raymond Reddington - "The Black List" quoting Warren Buffett: https://www.brainyquote.com/quotes/warren_buffett_138173
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Reza Yusof changed their profile photo
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Introduction The notion of risk appetite is used by many organisations as an attempt to diligently balance competing priorities with limited resources. Such statements represent an organisational expression of risks and rewards in the value system of the board and senior decision makers. However, there are serious methodological difficulties with this attempt to treat all risks as having the same underlying nature when, for example, market risks are quite different in nature to safety risks. Market vs safety perspective In the business community, risk appetite has often been expressed as meaning that an outstanding outcome can justify taking greater chances to achieve success. In policy terms, this means encouraging the organisation to select projects and programs with greater rewards for similar effort, which is to be applauded. This interpretation of risk appetite is most relevant to the market risk paradigm. There remain some serious caveats to this approach. It is ordinarily unacceptable to adopt a course of action, which despite demonstrating an almost certain outstanding upside benefit, nevertheless has a low possibility of destroying the entire enterprise. A joint venture option is usually the way forward in such circumstances. Safety has a different perspective. Often the consequences of failure are so high that there is simply no appetite for it. The notion that anyone has an appetite for death and maiming is presently not acceptable in Australian society. The notion of danger money (increased pay due to the hazards associated with the work) has been firmly rejected. If a workplace is not safe then work must stop. Instead, provided the situation is not prohibitively dangerous, the requirement is for (safety) risk to be eliminated or reduced so far as is reasonably practicable (SFAIRP), a matter which can be forensically tested in court. This is a positive demonstration of safety due diligence. The diagram below shows this difference graphically. Diagram courtesy of Richard Robinson, R2A From an overall business perspective a better term may be a risk tolerance statement or, keeping it generic across the different risk domains, a risk position statement. A risk position statement would be an articulation of the board’s understanding of the key risk issues for the business and their understanding of the management and optimisation of these risks. It would become a quality assurance document to ensure the board can transparently demonstrate risk management governance to stakeholders including the community, government and, if necessary, the courts. Sources The content on this page was based primarily on the following sources: Robinson Richard M and Gaye E Francis (2019). Engineering Due Diligence (11th Edition). R2A Pty Ltd, Consulting Engineers.
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Webinar - Software on Wheels: Driver Awareness and CAN drive Trial
Susan Olsen posted a calendar event in REBOK Community Activities
untilWebinar Recording: https://vimeo.com/316478754/a0d460913c Synopsis As we grapple with the reality of dealing with a range of Autonomous Vehicles (AV) on our roads, there is general agreement these vehicles will make driving easier, more comfortable, and eventually, safer. Entrusting the driving task to a computer will eventually become a reality, but the journey to then will be gradual, complex, and potentially dangerous. As the technology improves the risk profile changes and the number of unexpected and potentially dangerous events the car will not be able to reliably respond to will reduce. However, this raises new issues around driver awareness where the driver could become complacent in an environment where increasing speed and other, unforeseen obstacles could result in potentially dire consequences. This raises new challenges for many organisations involved with AV safety including regulators, manufacturers, law enforcement, and associated organisations such as Engineers Australia and the Australasian New Car Assessment Program (ANCAP). The ACT Government, together with Seeing Machines, has established an AV study - initiated the CAN drive - trial which will, through observing driver behaviour in an automated vehicle setting, help us better understand when and why, from both a safety and a regulatory perspective, a driver should be in control rather than the automated vehicle, and help to manage the transition from one to the other with reduced risk. The CAN Drive trial CAN drive supports a growing appetite internationally to understand issues such as when and how drivers will use automated driving functions and how it might impact their awareness of the environment around them, as well as their ability to take control of steering and speed functions from the vehicle when required, and at short notice. A panel discussion will be held at Seeing Machines offices, Fyshwick, and broadcast live via a National Webinar. Speaker 1: Mr Andrew McCredie, ACT Government AV Trial Governance Committee: Why CAN drive trial is being conducted. Speaker 2: Mr Ken Kroeger, Chairman, Seeing Machines Ltd: What Seeing Machines are doing, and what have found so far. Ken joined Seeing Machines in 2011 as CEO. Under Ken’s leadership the company has been strategically transformed into a recognized industry leader in computer vision, eye-tracking and intervention safety products and services with leading customers such as Caterpillar. Ken’s understanding of computer technology was honed at the North Alberta Institute of Technology. His experience as a technology entrepreneur came to the fore when he moved to Australia in the mid-1990s and co-founded 3D simulation and training provider Catalyst Interactive. Ken’s exposure to a wide range of industries, governments and defence/security agencies at an international level, has allowed him to develop a solid understanding of how technology can be applied to help people and organizations perform at a higher or safer level. Speaker 3: Mr James Goodwin, Chief Executive Officer, Australasian New Car Assessment Program: How this work impacts ANCAP's safety rating system. James Goodwin is a former journalist and news presenter with a professional career in corporate affairs and government relations. He has a particular interest in consumer advocacy and education, particularly in the areas of transport and safety as well as improving corporate governance in the not-for-profit sector. Prior to joining ANCAP, Mr Goodwin held the position of Director - Government Relations & Communications at the Australian Automobile Association (AAA). James also held a senior corporate affairs position with the industry body representing the interests of new car and motorcycle brands in Australia, the Federal Chamber of Automotive Industries (FCAI). Q&A Session Facilitator: Mr Geoff Hurst, FIEAust, National President of the Risk Engineering Society. -
Introduction Resilience can be defined as the ability of a system to respond to rapid changes in a positive manner. A particular challenge for complex projects is building the maturity of internal control systems to increase resilience in the event of uncertainty and unpredictable risks. Challenges As the world becomes more dynamic and volatile, proponents of a resilience approach to risk management maintain that rather than finding ways to predict risks, risk practitioners need to focus on innovating in the area of building organisation-wide resilience to unpredictable risks. Challenges include designing internal management systems with the ability to weather rapid changes, disruption to operations, unexpected changes in government and trade alliances, as well as market shocks. Standards One standard relevant to processes for building resilience is AS/NZ 5050:2010 Business continuity - Managing disruption-related risk. This standard outlines a process of identifying critical business functions and protecting them to increase resilience. Sources: The content on this page was primarily sourced from: Webinar titled ‘Perspectives on Risk: Engineers, frameworks and new ways of thinking’, delivered to REBOK Community on 29 May 2018 by Warren Black, Principal and Founder, Complexus
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Introduction New approaches to risk management are emerging in response to increasingly large and complex project environments and systems with unpredictable risks. These include the application of complexity sciences to help organisations understand how complexity influences risk management. What is complexity? As complexity means different things to different people, there is no universally accepted definition, and within a single operating environment, a mix of simple and complex elements can exist. The formal study of complex phenomena is known as complexity science and includes a broad range of disciplines, such as chaos theory, systems thinking, resilience theory, network theory, social theory, and computational theory. Application of the complexity sciences has attracted interest from several fields including risk engineers, managers and practitioners due to their potential to improve the control of complex operating environments and related challenges such as risk and project management. What is a complex system? A complex system is an entity comprised of a large number of highly energised and interconnected contributing parts. In nature, some examples of complex systems are the weather and rainforests. The human world has also produced complex systems, including social structures such as political systems and economies, as well as large organisations, global communications networks, cities, and major projects. As the systems constructed by humans become more complex, risk engineers and other professions are striving to learn from natural complex systems in order to better understand the behaviour and challenges of human complex systems. Sources: The content on this page was primarily sourced from: Webinar titled ‘Perspectives on Risk: Engineers, frameworks and new ways of thinking’, delivered to REBOK Community on 29 May 2018 by Warren Black, Principal and Founder, Complexus Webinar titled ‘An Introduction to Complexity and How it Influences Risk Management’, Session 1', delivered to REBOK community on 30 April 2019 by Warren Black, Principal and Founder, Complexus and Geoff Hurst, Principal, ENGENEOHS
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Introduction While conventional risk management approaches work well when all risks are foreseeable, the increased prevalence of complex and uncertain environments has led to the need for scalable, fit-for-purpose management solutions. Challenges Conventional risk management approaches such as ISO 31000 are limited in their guidance on controlling unpredictable risks. There are many classes of unpredictable risk, including: Unknown risks Black Swans Rogue Waves Another challenge for conventional risk management systems is that the emphasis tends to be on identifying, measuring and treating specific risks rather than establishing internal controls to address areas of weakness and improve the resilience of systems faced with unpredictable risks. Conventional risk management models and standards should also be rigorously assessed to ensure they are tailored to specific projects and applications, rather than being applied in a ‘one-size-fits-all’ method. Emerging approaches Emerging approaches to risk management include: Complexity Sciences Resilience Sources: The content on this page was primarily sourced from: Webinar titled ‘Perspectives on Risk: Engineers, frameworks and new ways of thinking’, delivered to REBOK Community on 29 May 2018 by Warren Black, Principal and Founder, Complexus
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Introduction Risk engineering is an element of other forms of risk management , including enterprise and project risk management. It can be defined as the identification, prioritisation and control of the material risks which may impact engineering processes, quality and safety. Risk engineering is informed by the requirements of the specific project, broader corporate environment and project management organisation, as well as relevant engineering disciplines. Risk engineering elements Typical elements of risk engineering include: Safety assurance Safety in design (SID) Process safety Systems assurance Fault analysis Reliability engineering Hazardous operations studies (Hazops/Hazids) Probabilistic risk determination Sources The content on this page was primarily sourced from: Webinar titled ‘Perspectives on Risk: Engineers, frameworks and new ways of thinking’, delivered to REBOK Community on 29 May 2018 by Warren Black, Principal and Founder, Complexus
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Introduction Enterprise risk management is the identification, prioritisation and treatment of the risks which may hinder an organisation or company from meeting its business objectives. Large engineering firms, as well as high-risk industries including mining, oil and gas will generally have a central enterprise risk management framework to which all other forms of risk management – including project risk management and risk engineering – should align. Elements of enterprise risk management frameworks Typical elements of an enterprise risk management framework include: Corporate governance Strategic risk management Financial risk management Operational risk management Auditing and corporate assurance Insurance These elements are usually overseen by a group or chief risk officer. Further reading Click this link for a list of related pages. Sources: The content on this page was primarily sourced from: Webinar titled ‘Perspectives on Risk: Engineers, frameworks and new ways of thinking’, delivered to REBOK Community on 29 May 2018 by Warren Black, Principal and Founder, Complexus
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