Simplifying Risk Management

Published December 6, 2011

In recent months I have been following a blog on risk management written by Melanie Lockwood-Herman. She is the Executive Director of an American non-profit dedicated to helping non-profit organizations manage risks. Funded primarily by insurance companies (don’t hold this against them!), the Non Profit Risk Management Centre provides lots of great resources, many of which are applicable to the sport community in Canada.

Recently, Melanie has published a book titled Ready or Not: A Risk Management Guide for Nonprofit Executives. It is a refreshing read for the reason that it espouses some of the same attitudes about risk that I do: namely, that there is an upside to risk, that as leaders we should take more risks (not fewer), and that risk management can be understood using more practical, accessible and jargon-free approaches.

Previously, I have written about the 7 Sins of Board Dysfunction and have used these as educational tools to highlight the corresponding virtues that help organizations govern more effectively. Melanie also uses this biblical metaphor by discussing the Seven Sins and Seven Virtues of risk management in this book. I thought I would share them.

Seven Sins of Risk Management

• Stepping over a banana peel
• Assuming others have your nonprofit's interests at heart
• Operating as if insurance will take care of your risks
• Signing a contract you have not read
• Acting as if staff and volunteers will do no harm
• Worrying without taking action
• Not getting started

Seven Virtues of Risk Management

• Being clear and concise
• Asking and inviting tough questions
• Trying the simple approach first
• Putting people first
• Learning from experience
• Anticipating the future
• Seeking help

While in this mindset of trying to simplify what are very complex things, I thought I would share the acronym that I have developed and that I find helpful. A risk registry might be 20 pages long or more, and a risk assessment might take you and your staff days to complete, but at the end of the day risk management might just mean going about your daily job differently. Every day I encourage you to:

          R – reflect on your vision, mission, values and activities

          I – integrate risk thinking into all your decisions

          S – scan continually for new or evolving risks

          K – keep it simple and understandable