RISK MANAGEMENT FRAMEWORK

Approving authority University Council

Approval date 5 August 2013 (3/2013 meeting)
Advisor Vice President (Corporate Services) | [email protected] |
(07) 373 57343
Next scheduled review 2018
TRIM document 2013/0014762

Document URL http://policies.griffith.edu.au/pdf/Risk Management Framework.pdf

Table of Contents
1. Scope & Objectives of the Risk Management Framework ........................................... 4
1.1 Scope of the Risk Management Framework ..................................................................................................................... 4
1.2 Objectives of the Risk Management Framework ............................................................................................................ 5
1.3 Why is Risk Management Important? ........................................................................................................................................... 5
2. Risk Management Framework ....................................................................................................... 6
2.1 What is risk? ....................................................................................................................................................................................... 7
2.2 Development of risk registers .................................................................................................................................................... 7
2.3 Risk appetite ....................................................................................................................................................................................... 7
2.4 Risk management methodology .............................................................................................................................................. 8
A Communication ................................................................................................................................................................................. 8
B Establish context .............................................................................................................................................................................. 8
Strategic Context ......................................................................................................................................................................................... 8
Operational Context ................................................................................................................................................................................... 8
C Risk identification ............................................................................................................................................................................. 9
How does the University identify risks? ........................................................................................................................................... 9
Categories of Risk ....................................................................................................................................................................................... 9
D Risk Analysis and Evaluation .................................................................................................................................................... 9
Measuring the Level of Likelihood and Consequence ............................................................................................................. 9
Inherent risk rating ................................................................................................................................................................................... 10
Prioritising risks.......................................................................................................................................................................................... 11
Evaluate and record existing controls............................................................................................................................................ 11
Determine the Level of Residual Risk ........................................................................................................................................... 11
E Risk treatment ............................................................................................................................................................................... 11
F Monitoring and Reporting ........................................................................................................................................................ 12
3.1 Vice Chancellor .............................................................................................................................................................................. 12
3.2 Vice President (Corporate Services) .................................................................................................................................. 12
3.3 Deputy and Pro Vice Chancellors ........................................................................................................................................ 13
3.3 Risk Administrator ........................................................................................................................................................................ 13
3.5 Internal Audit Responsibilities ................................................................................................................................................ 13
4. Development of Risk Management Plans ............................................................................ 14
4.1 Enterprise Risk Management Program ............................................................................................................................. 14
Operational risk management program ........................................................................................................................................ 14
4.2 Project Risk Management ........................................................................................................................................................ 14
5 Risk Management Reporting ................................................................................................................. 15
5.1 Risk Management Reporting Objectives .......................................................................................................................... 15
Business Unit and Finance & Resource Committee reporting ......................................................................................... 15
Third Party Reviews ................................................................................................................................................................................ 15
Post event Analysis ................................................................................................................................................................................. 15
Annual University Council Review................................................................................................................................................... 15
6 Audit and Assurance ................................................................................................................................. 16
6.1 Internal Audit ................................................................................................................................................................................... 16
6.2 Business Continuity Management ....................................................................................................................................... 16
Insurance Strategy ................................................................................................................................................................................... 16
Disaster Recovery Planning ............................................................................................................................................................... 16
Business Continuity Planning ............................................................................................................................................................ 16
IT – Resilience and Disaster recovery planning....................................................................................................................... 16
6.3 Compliance ...................................................................................................................................................................................... 16

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7 Training & Communication .................................................................................................................... 17
7.1 Training .............................................................................................................................................................................................. 17
7.2 Communication of responsibilities and Accountabilities .......................................................................................... 17
7.3 Advice and Support ..................................................................................................................................................................... 17
Appendix 1 –Likelihood Rating: Evaluation Criteria ...................................................................... 18
Appendix 2 – Consequence Rating: evaluation criteria.............................................................. 19
Appendix 3 – Project Risk Assessment Template ........................................................................... 20
Appendix 3 - Project Risk Assessment Template continued ................................................................................................. 21
Risk Quantification ................................................................................................................................................................................... 21
Prioritising risks.......................................................................................................................................................................................... 22
Risk Plan ....................................................................................................................................................................................................... 22
Appendix 4 – Operational Risk Management Plan Template .................................................... 23
Appendix 5 - Glossary of Risk Management Terms ....................................................................... 24

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1. Scope & Objectives of the Risk Management Framework
1.1 Scope of the Risk Management Framework
This document outlines the Risk Management Framework for activities within the University and all
its operations and entities. The Framework defines the University’s risk management process,
methodology, appetite, training and reporting, and also establishes the responsibilities for
implementation.
Risk management is part of the University’s day-to-day operations and is undertaken at Group and
Divisional levels as well as more broadly at the overall University level. The overall aim of risk
management within the University is to ensure that organisational capabilities and resources are
employed in an efficient and effective manner to manage both opportunities and threats. To this
end, the University has a Taxonomy of Risk Management, i.e. the Risk Management Framework is
both a top down (University wide) and bottom up approach (including assessments from Groups
and support service Divisions, WHS, major projects, and business continuity). This taxonomy is
illustrated below.

Corporate – updated annually

Groups

Support Service Divisions

Others:
• Workplace Health & Safety (WHS)
• Major Projects
• Business Continuity

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1.2 Objectives of the Risk Management Framework
The objective of this Risk Management Framework is to provide a formal process to assist the
University in:
 Encouraging understanding by managers and their staff of the implications of risk exposures,
opportunities and their risk management, in their day-to-day work and in strategic and
operational planning activities;
 Developing and implementing procedures to ensure that risks are identified, assessed against
accepted criteria and that appropriate measures are implemented;
 Defining and documenting responsibilities and processes.

1.3 Why is Risk Management Important?

Risk influences every aspect of the operations at the University. Understanding the risks we face
and managing them appropriately will enhance our ability to make better decisions, safeguard our
assets, enhance our ability to provide services to our students and to achieve our University
mission and goals.
The University views the management of risks to its people, assets and all aspects of its operations
as an important responsibility. It is committed to upholding its moral, ethical and legal obligations by
implementing and maintaining a level of risk management which protects and supports these
responsibilities.
An effective Risk Management Framework is not only good business practice but provides
organisational resilience, confidence and benefits, including:
 Provides a rigorous decision-making and planning process;
 Provides the University with the flexibility to respond to unexpected threats;
 Takes advantage of opportunities and provides competitive advantage;
 Equips managers with tools to anticipate changes and threats that face the University and to
allocate appropriate resources;
 Provides assurance to University Council, management and stakeholders that critical risks are
being managed appropriately within the University; and
 Enables better business resilience and compliance management.

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2. Risk Management Framework
Summary of the Griffith University Risk Management Framework

When to do a risk How to assess risks How to treat risks How to report and Monitoring & Assurance
assessment? (analyse & evaluate) communicate

Annual review of corporate Assess inherent risk (without Develop risk mitigation Summary of corporate risks Risk based internal audit plan,
risks by Senior Management controls) by considering both actions included in Risk Management including review of:
<Section 4.1> probability and impact Plan and reviewed by
Establish accountability and
Finance, Resources and  Adequacy and
Groups and Support Service Significant projects - using a timeframe effectiveness of key
Divisions risk identification, semi quantitative approach, Risk Committee (FRRC)
Implement risk mitigation controls to manage high
based on specific operational <Appendix 3> and University Council
plans. inherent risks
risks and needs <Appendix <Section 5>
WH&S qualitative approach.  Independent review of
5> Develop respective risk Incident reporting to VP (CS)
<Appendix 5> actions
management plans in with significant issues
WH&S - initially for all
Document key controls to Groups and Divisions that
 Internal and External
activities which may involve reported to FRRC as part of
Audit plans are risk based
manage risk determine priorities, biannual reporting. <Section
hazards and risk. Re-  Post event analysis
Divisions budgeting and 5>
assessment is required if Assess overall control reviews are undertaken in
planning requirements to
there are changes, new work effectiveness Annual reporting (top 10 relation to failures,
address key risks.
processes or new equipment, operational, Group and successes and near
Assess residual risk (after
after an incident or near miss Significant risk and support service Division risks) misses
consideration of controls)
compliance programs may to FRRC <Section 5> Periodic audit of compliance
Significant projects risks (over
Risk decision against include: with Risk Management
$20m in value); during the Quarterly tracking and
project planning phase
appetite <Section 2.3>  Environmental Framework
consultation with Groups, and
management system
Annual assessment of support service Divisions on
 Disaster recovery and
consolidated issues register Statutory External Audit
business continuity and fraud Business Continuity Plan
risks
 Legal Compliance System Compliance breaches and
Fraud malpractices reported
to FRRC
Responsibility

VC, DVCs and PVCs Internal Audit

Staff, Management and Operations

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2.1 What is risk?

In this Risk Management Framework, risk is defined as an event that may have an impact on the
achievement of the University’s objectives. Risk may arise from external factors (e.g. risks from
global economic crisis, change in student demographics and numbers, changing legislation) or
internal sources (e.g. new projects, new faculty, infrastructure and capacity challenges,
performances, etc.).

2.2 Development of risk registers

Risk registers identify and record the risks facing different areas of business. Identifying risk is a
critical step in managing it. Risk registers allow the University to assess the risk in context with the
overall University strategy, and help record the controls and treatments of those risks. Risk
registers are developed on three tiers, Corporate level, the operational level (Group and Support
Service Divisions), and the project level (Refer Section 4).

2.3 Risk appetite

Once risks are identified, the adequacy of controls must be considered within the context of the
University’s risk appetite at the time. This will vary with business and operational strategies, from
year to year depending on the University’s circumstances. The top 10 risks of each risk
management plan should be submitted to the Finance, Resources and Risk Committee to monitor
the level of acceptable risk for high risks, and extent of appropriate mitigating actions. Risk appetite
is the amount of risk, on a broad level, that the University is willing to accept in pursuit of value, and
should reflect:
 Risk management philosophy per location, project, process, etc;
 Capacity to take on risk;
 the University objectives, business plans and respective stakeholder demands;
 Evolving industry and market conditions; and
 Tolerance for failures with quantitative values, where applicable.

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2.4 Risk management methodology
The Risk Management Process is based upon an internationally accepted standard: ISO 31000:
2009, as shown below

ESTABLISH THE CONTEXT

IDENTIFY RISKS
COMMUNICATE & CONSULT

ANALYSE RISKS

MONITOR & REVIEW

DETERMINE DETERMINE
LIKELIHOOD CONSEQUENCE
A
R
S
I
S ESTIMATE RISK LEVEL
S
E
K
S
S
S
EVALUATE RISKS

ACCEPT
RISKS

TREAT RISKS

The above illustration is detailed within the key steps of the University Risk Management
methodology below:

A Communication
Ongoing communication and consultation with all involved parties to ensure understanding of the
process and its intended outcomes is performed by the Risk Administrator. This involves collating
reports for presentation to the Finance, Resources and Risk Committee and University Council;
facilitating ongoing operational reviews of risk registers, coordinating risk assessments for specific
projects and ongoing advice and support to ensure compliance with the Risk Management
Framework.

B Establish context
Risk management takes place within the goals and objectives of the University. Therefore, risk
management must be placed into both a strategic and operational context.
Strategic Context
Strategic risk identification involves the relationship between the University and the broad external
environment/community. A range of issues should be considered in examining the strategic content,
including:
 Opportunities and threats associated with the local, regional, state and global economic, social,
political, cultural, environmental, regulatory and competitive environments;
 Key thrusts of stakeholder strategies; and
 Strengths and weaknesses of the University in attaining corporate objectives and exercising a
state of influence amongst local and national universities.
Operational Context
Operational risk identification involves gaining an understanding of the organisation’s capabilities,
goals, objectives, strengths and weaknesses by considering:
 Organisational structure and culture;
 Geographics/demographics;

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 The identity and nature of interaction with key stakeholders;
 The existence of any operational constraints;
 Objectives and key performance indicators;
 Business resilience vulnerabilities;
 Relevant issues relating to recent change management risk, performance or audit reviews;
 Relevant stakeholder community concerns or requirements;
 Regulatory and contractual requirements and constraints; and
 Business management systems.

C Risk identification
Risk identification is a critical activity at both a strategic and operational level. It needs to include all
significant sources of risk, including those beyond the University’s control. If a risk/threat is not
identified, there can be no strategy to defend against it. The objective of this step is not to create an
onerous and lengthy list of all possible risks, but to identify all significant risks that could impact
Group or Support Service Divisions. The risk register format is included in Appendix 4.
How does the University identify risks?
Risk can be identified through the use of:
 Focus groups (using brainstorming approaches, SWOT analysis techniques, project categories,
or broad business categories);
 Workshops;
 Interviews with respective management by the Risk Administrator; and
 The intranet is also a means of reporting incidents or risks to the Risk Administrator for
consideration.
Enterprise wide risks to the organisation are identified and reviewed annually by Executive Group,
Finance and Resource Committee and University Council. These risks form the basis of the overall
risk profile for the organisation.
The Risk Administrator facilitates ongoing operational reviews to develop Group and Support
Service Division risk registers and action plans. A consistent format is maintained throughout to
facilitate reporting and summarising (separate templates are used for Project risk assessments –
refer Appendix 3).
Categories of Risk
The following broad categories of risk are used to enable appropriate aggregation and to assist with
the identification of systemic issues and trends across the University.

1 Students
2 Financial
3 Operational
4 Information and communication technology
5 Environmental
6 Legal and Regulatory Compliance
7 Organisational effectiveness (resourcing and industrial relations)
8 Workplace Health & Safety
9 Reputation & Corporate Social Responsibility
10 Projects

D Risk Analysis and Evaluation

The objectives at this step are to separate the minor risks from major ones. The level of risk is
determined by measuring the likelihood of each event arising and the associated consequences.
Measuring the Level of Likelihood and Consequence
Other than WHS Risks, consequence will generally be assessed against the direct financial and
operational impacts to the University. However, for some risks the most significant consequence is
the impact on the University’s reputation rather than the direct financial consequence. For such
risks, the direct financial consequence of a risk may be negligible, but continuing reoccurrences

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may result in significant damage to the University's reputation and standing which impacts the
attractiveness of the University to students or prejudices future projects or government funding.
As the University-wide risk management program focuses on operational and corporate risks, the
financial loss given to each rating has been determined in the light of what impact would be felt by
the University as a whole. For Group/Division specific risk assessments, the same consequence
and financial loss criteria should be utilised. However, a specific Project consequence criterion has
been established.
Probability or likelihood estimations are established giving due consideration to the effectiveness of
existing control measures. The qualitative terms have been adopted from the Australian Standard.
The likelihood criteria are included in Appendix 1.
The Consequence Rating Evaluation Criteria Chart (included in Appendix 2) defines the
consequence criteria, assessed against potential financial loss, reputation impact, health and safety,
legal and regulatory compliance and management time and effort.
The limits contained in this Consequence Rating Evaluation Criteria are based on the
management’s assessment of the University’s ability to continue operation in the event of a risk
being realised. The setting of the lower limit of $1M as “Insignificant” has been fixed in light of the
test of materiality. The upper limit of $50M is based on management’s assessment of the ability of
the University to support an unexpected loss of this magnitude whilst still remaining solvent. As the
University’s capacity to bear loss changes, the values attributed to these rating will be reviewed.
Inherent risk rating
An inherent risk rating represents the level of risk in the absence of a control environment and is
arrived at after measuring the likelihood and the consequence of an event occurring.
The matrix format ranking has been adopted for the University in which potential risks are ranked
as Extreme, High, Moderate or Low. This is as follows:

Table of Risk Ranking

Table 2: Risk Ranking matrix

Consequences
Likelihood
Insignificant Minor Moderate Major Catastrophic
Almost
Low Medium High High Extreme
Certain

Likely Low Medium Medium High High

Possible Low Low Medium Medium High

Unlikely Low Low Low Medium Medium

Rare Low Low Low Low Medium

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Prioritising risks
The purpose of prioritising the risk is to determine the level of action needed for the identified and
assessed risks.

Table of Management Action

Risk Score What should I do?

9-10 Extreme Immediate action required

Action plan required, senior management
7-8 High attention needed
Specific monitoring or procedures required,
5-6 Medium management responsibility must be specified
Manage through routine procedures. Unlikely
2-4 Low
to need specific application of resources.

Evaluate and record existing controls

Existing controls are identified and the control effectiveness is assessed based on management’s
understanding of the controls effectiveness. The University’s Internal Audit function may assist in
the evaluation of control effectiveness, if required. However, this remains a management
responsibility.

Table of Control Levels

Level of Control Audit Definition

A high degree of reliance can be place on the system of internal control.

Good Compensating controls are in place such that even if part of the system breaks
down, the four control criteria will probably still be met
The controls can be relied upon; however, some improvements to controls can
Satisfactory
be made
The system can generally be relied upon in most circumstances but there are
Marginal some circumstances where one or more of the four control criteria may not be
met
The system of internal control cannot be relied upon to meet the four control
Weak criteria. If there has not already been a significant breakdown, it is only a matter
of time before this occurs
The four control criteria are:
 Reliable and accurate information.
 Compliance with policies, plans, procedures, laws, regulations and contracts.
 Safeguarding of assets.
 Economic and efficient use of assets.

Determine the Level of Residual Risk

Residual risk represents the level of risk after taking into account existing controls for each risk. By
relating the likelihood and consequence ratings after considering controls for each risk using the
Evaluation Criteria, the level of residual risk is determined. The Consequence Risk Analysis and
Evaluation Criteria for the University’s various categories of risk are detailed in the following table.

E Risk treatment
The objective of this step is to identify how the identified risks will be treated. Risk treatment
involves identifying the options for treating each risk, evaluating those options, assigning
accountability (for Extreme, High and Moderate residual risks) and taking relevant action. The
following options are available for treating risks and may be applied individually or in combination,
with due consideration of risk appetite:

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 Not to proceed with the activity or choosing an alternative approach to
Avoid the risk achieve the same outcome.
Aim is risk management, not aversion.
Reduce the likelihood - Improving management controls and procedures.

Mitigate Reduce the consequence - Putting in place strategies to minimise adverse

consequences, e.g. contingency planning, Business Continuity Plan, liability
cover in contracts.

Shifting responsibility for a risk to another party by contract or insurance. Can

Transfer the risk be transferred as a whole or shared.

Controls are deemed appropriate.

Accept the risk These must be monitored and contingency plans developed where
appropriate.

F Monitoring and Reporting

The objective for this step is to monitor the risks and effectiveness of the risk treatment program.
Risks should be reviewed regularly to ensure relevancy and currency. Refer Section 5 for detail.

3. Roles and Responsibilities

University Council will oversee risk management within the University, on the advice of the Finance,
Resources and Risk Committee.

The Vice Chancellor will be responsible for the implementation of risk management within the
University, and for responding to and reporting on significant risks that may emerge from time to
time. The implementation of an effective Risk Management Framework is a leadership
responsibility requiring the support of University Council, Vice Chancellor, Deputy Vice Chancellors
and Pro Vice Chancellors. University Council and the Vice Chancellor have set out the University’s
expectations in a Risk Management Policy. The Vice Chancellor and Senior Managers provide
support in a number of ways as outlined below.

3.1 Vice Chancellor

The Vice Chancellor is responsible for ensuring that the University takes appropriate measures to
identify, assess and manage corporate risks. The ability to assess risk accurately, formulate
effective policy and monitor compliance is an essential function of good corporate governance.
The Vice Chancellor has a number of responsibilities in relation to the management of risk,
including ensuring that —
 A control environment supporting the University’s strategic direction and culture is implemented
and maintained;
 the University’s risk appetite is aligned with strategy;
 the University operates within its legal and regulatory obligations;
 the University can continue to function in the face to major disruptions;
 Major policies keep abreast of any material changes in the operating environment.

3.2 Vice President (Corporate Services)

The Vice Chancellor has delegated to the Vice President (Corporate Services) responsibility for the
establishment of an effective risk management framework throughout the University.

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3.3 Deputy and Pro Vice Chancellors
The Deputy Vice Chancellors and Pro Vice Chancellors are responsible for implementing risk
management within their portfolio areas to;

 Understand their risk management obligations;

 Ensure the means for identifying and reporting risks and exposures are provided;
 Develop and maintain risk registers;
 Ensure regular reporting against the ten (10) most significant risks in each Group and Support
Service Divisions.

3.3 Risk Administrator

The Risk Administrator is a key position with the responsibility to facilitate the implementation of
risk management processes by —
 Facilitating risk assessments and risk management activities;
 Providing advice and support;
 Monitoring the application of the risk management process across the University and reporting
on the level of risk management implementation; and
 Promoting acceptance of risk management techniques.

It is not the Risk Administrator’s role to manage risks on behalf of other parties. The appointment
of a Risk Administrator therefore does not remove the responsibility from management and staff to
manage risks and controls for which they are accountable.

3.5 Internal Audit Responsibilities

Internal Audit is responsible for providing some independent assessment of the effectiveness of the
University’s processes for managing particular areas of business risk. The scope of Internal Audit’s
risk-based program is agreed as part of an Annual Internal Audit Plan which is approved by the
Audit Committee.

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4. Development of Risk Management Plans
A Risk Management Plan (or register) outlines the foreseeable risks and provides a set of actions
to be taken both to prevent the risk from occurring and reduce the impact of the risk should it
eventuate (template detailed in Appendix 4). More specifically, the plan includes:
 List of foreseeable significant risks;
 Rating of the Likelihood and Consequence of each risk occurring;
 Set of preventative actions to reduce the probability of the risks occurring;
 Set of contingent actions to reduce the impact should the risk eventuate; and
 Process for managing risks.

4.1 Enterprise Risk Management Program

The Vice Chancellor through the Vice President (Corporate Services) arranges an annual review of
the key corporate risks. Key enterprise risks are the highest potential risk before controls and
treatment strategies are applied (inherent risk). These risks and their controls are reviewed at the
University executive level and reported annually to the Finance, Resources and Risk Committee
and University Council.
To support this, senior management will annually prepare Group/Divisional risk registers as
required. Due dates will be established and communicated to all responsible executives within
respective Group and Support Service Divisions.
Managers will present their Risk Plans to the Vice Chancellor for review and confirmation of the
acceptability of the risk plan.
Operational risk management program
The Risk Administrator facilitates ongoing operational reviews to develop Group and Support
Services Division risk registers and action plans, as required. A consistent format is maintained
throughout to facilitate reporting and aggregation. Risks are linked to objectives to appropriately
develop controls and strategies. The operational register template is detailed in Appendix 4.

4.2 Project Risk Management

Major projects are subject to risk examination and will maintain sufficient risk management plans to
provide an effective response in the event of significant operating risks. A major project is a
projects (other than building projects) over $20m.
The University’s Project Risk Assessment procedures (template is detailed in Appendix 3) outline
a methodical and informed decision making process for evaluating risks associated with major
projects. This template is a semi quantitative guideline only and sections may be added, removed
or redefined to meet particular project circumstances. In addition, PRINS II may also be utilised as
a project risk management tool, where available. The process is facilitated by the Risk
Administrator in conjunction with the University project consultants. Each major project will have its
own risk register.
The risk plan should be documented early in the project – during the planning phase, and prior to
execution phase. This will ensure any risks identified are addressed during the execution phase
itself.

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5 Risk Management Reporting
5.1 Risk Management Reporting Objectives
Documentation of risk management plans is designed to be brief, but with sufficient detail to
provide understanding of the risk, key controls and rationale for mitigation strategies.
Monitoring and reporting against the University’s risk management function is achieved through a
number of complementary processes, illustrated below:
Business Unit and Finance & Resource Committee reporting
Key operational risks are discussed at Group and Divisional management meetings on a quarterly
basis. The Risk Administrator will aggregate and develop a 6 monthly report (top ten (10) significant
risks - detailed template in Appendix 5). More frequent reporting against high level risks occurs as
deemed necessary, including direct reporting by the manager accountable –refer chart overleaf.
The Group/Divisional level risks are collated by the Risk Administrator, and presented annually, to
the Finance, Resources and Risk Committee (illustrated overleaf). This report will include:
 Risk register of top 10 corporate risks;
 Executive summary of key changes in risk profile and appetite; and
 Commentary on significant residual risks (for committee consideration).

Third Party Reviews

Reviews by independent assurance providers such as internal and external audit, overseen by the
Finance, Resources and Risk Committee, provide an objective view of the University’s controls and
therefore the elements of the University’s Risk Management Framework.
Internal audit and external audit planning is risk-based to identify and focus on the University’s
most significant business risks.
Post event Analysis
Post event analysis reviews are undertaken in relation to failures, to provide focused reviews of the
strengths and weaknesses of the University’s Risk Management Framework.
Annual University Council Review
The Finance, Resources and Risk Committee undertakes an annual assessment of University’s
control environment for the purposes of providing advice to University Council. This assessment
includes —
 Changes in the nature and extent of the University’s most critical risks since the last
assessment and the University’s ability to respond to those risks;
 The scope and quality of the ongoing monitoring of risks by management and assurance
providers such as internal audit;
 The level of reporting on the outcome of the risk monitoring process and its contribution to
University Council’s knowledge of the effectiveness with which risks are being managed; and
 The occurrence of significant control failures, the implications arising from these failures,
corrective action undertaken and controls to manage future occurrences of the threat.

The Committee reports its assessment to University Council for consideration.

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6 Audit and Assurance
6.1 Internal Audit
Internal Audit is a key component of the University’s assurance framework.
The primary objective of Internal Audit is to provide an assurance framework to underpin the risk
management program. This includes reviews of processes and controls over high risks as
determined through the risk planning process. The internal audit function provides independent
appraisal of the adequacy and effectiveness of internal controls. Recommendations will be
provided, where applicable, for improvements to controls, efficiency and effectiveness of processes.

The internal audit function reports directly to the Audit Committee. Internal Audit also provides an
ongoing cycle of compliance audits of key controls, which is built into the annual audit planning
process as approved by the Audit Committee.

6.2 Business Continuity Management

Insurance Strategy
Insurance is a means of transferring residual risk. The University’s insurance program is reviewed
on an annual basis, taking into account the risk profile, the prevailing status of the insurance market
and the University’s risk appetite at the time.
Disaster Recovery Planning
Operating processes will maintain plans to provide effective response in the event of a significant
safety, technology, or environmental incident. Such plans will provide for expedient response to
protect the safety and well being of personnel, the protection of the University’s assets, and
strategies for recovery from unwanted events and minimising disruption to operations.
Business Continuity Planning
A Business Continuity Plan will be maintained to ensure that the University is able to effectively
deal with any issue that may constitute a significant risk to our University’s reputation, or may
adversely impact on the normal operation of the University.
IT – Resilience and Disaster recovery planning
A primary objective in developing an Information and Communication Technology (ICT) strategy is
to ensure the resilience of ICT infrastructure and support systems.
A University ICT Disaster Recovery Plan will be maintained to ensure the continuity of ICT systems
availability and protection of data in the event of an unwanted event.

6.3 Compliance
The University has an effective system to ensure the University is aware of and in compliance with
legislative, contractual and policy requirements.

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7 Training & Communication
The University has clarified roles, responsibilities accountabilities and authorities at all levels of the
University. The University Risk Management Framework is embedded in operations through a
number of communication, training and support systems, including:

7.1 Training

To ensure that adequate risk management competency levels are achieved and maintained, the
University provides regular training courses in the risk management process and its application in
the University.
Specific risk management training sessions will be held on an annual basis, aimed at providing an
overview of the Risk Management Framework. The training will be facilitated by the Risk
Administrator. Additional ad-hoc training will be provided as required.
Instruments providing training on appropriate controls include job descriptions, inductions, policies,
procedures, terms of reference, charters, performance planning and review programs, contracts
and delegations.

7.2 Communication of responsibilities and Accountabilities

Risk management responsibilities, accountabilities and authorities are set out in:
 The Risk Management Policy;
 Positions descriptions;
 Delegations
 the University’s intranet;
 Project documentation;
 Performance planning and review documentation; and
 Risk registers.

7.3 Advice and Support

Risk management responsibilities, accountabilities and authorities are also available on the
University’s intranet. Advice and support in relation to risk management is available by consulting;
 The Risk Administrator;
 Vice President (Corporate Services); and
 University’s Risk Management Framework document.

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Appendix 1 –Likelihood Rating: Evaluation Criteria
You will determine how likely it is that Griffith will be exposed to each specific risk after taking into account current internal controls and considering factors such as:
1 Anticipated frequency of occurrence;
2 The external environment (e.g. regulatory, economic, competition, community expectations and market issues);
3 The procedures, tools and skills currently in place; and
4 History of previous events – both Griffith and other providers.

Likelihood rating

The number of times within a specified period in which a risk may occur either as a consequence of business operations or through failure of operating systems,
policies or procedures.

Rating Description Occurrence Probability

Almost Certain Expected to occur in most circumstances Multiple / 12 months > 80%

Likely Will probably occur in most circumstances Once / 12 months 61 – 80%

Possible Might occur within a 5 year time period Once / 12 months – 5 years 41 – 60%

Unlikely Could occur during a specified time period Once / 5 – 10 years 21 – 40%

Rare May only occur in exceptional circumstances Once / > 10 years < 20%

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Appendix 2 – Consequence Rating: evaluation criteria
Business risks are assessed in terms of the consequence of their impact on strategic objectives. Indirect financial consequences such as reputation and management effort
are key considerations. In addition financial impacts are also considered. The following table is used to guide the assessment of impact of each identified risk.

Consequence Category
Factor of Consequences /
categories of risk
Insignificant Minor Moderate Major Catastrophic

Compliance with Oversight on reporting activity that Minimal non-compliance to relevant Non-compliance with legislation affecting Non-compliance with legislation affecting Non-compliance with legislation affecting
is under control. No penalty or legislation, within Group or Divisions. other Group or Divisions. Possible closure Group or Divisions activities. Closure of closure of core Group or Divisions operations
Legislation. imprisonment. Breaches by an individual staff member. of a course or Research Centre, penalty several non-core operations. High possibility or key business activities and/or large penalty
Penalty may be incurred. and/or imprisonment. for individual/corporate penalty and/or (individual/corporate) and/or imprisonment.
Corporate, Group or Support Service

imprisonment.

Damage to Reputation. Minimal adverse publicity in local Adverse publicity in local/state press. Extended negative local/state, plus national Longer-term nation wide and international Extended negative national and international
press. Letters received and printed Letters to the Editors, with follow up media coverage. Requirement to manage coverage. Need to increase focus on wide coverage. Requirement to implement a
but no further action taken. comments from the readership or key stakeholders. management of a broader group of communication plan for all stakeholders.
interested parties. stakeholders.

Disruption to Established No interruption to service. Some disruption manageable by altered Disruption to a number of operational Several key operational areas closed. Disruption to services causing campus closure
Inconvenience to localised operational routine. Reduction in areas/campus. Closure of an operational Disruption to teaching / course schedules or or key business closure for more than one
Routines and operations. operations. operational routine. area/campus for up to one day. key business activities for up to one week. week.

Financial. Less than $1M $1M to $5M. $5M to $20M. $20M to $50M. Greater than $50M.
Division Activity

General Environmental & No lasting detrimental effect on the Short term, detrimental effect on the Serious, discharge of pollutant or source of Long term detrimental environmental or social Extensive detrimental long term impacts on the
environment environment or social impact, community annoyance within general impact i.e., chronic &/or significant discharge environment and community i.e., catastrophic
Social Impacts. i.e., harm, nuisance, noise, fumes, E.g. Minor discharge of pollutants within neighbourhood that requires remedial of pollutant. &/or extensive discharge of persistent
odour or dust emissions of short- local neighbourhood. action. hazardous pollutant.
term duration.

WHS Incident – no lost time. No injury. Injury – no lost time. First aid required. Injury – lost time compensable injury. Fatality or serious injury/stress resulting in Multiple fatalities (not natural causes).
Medical treatment required. hospitalisation.

Management Time and Event absorbed by normal activity. Management effort required to minimise A significant event managed through A critical event, which with proper Executive Management focus away from day to
the impact. normal practices. management can be endured. day key functions for extended periods.
Effort
Project Budget # <1% of project budget 1 to 5% of project budget 5 to 10% of project budget 10 to 25% of project budget >25% of project budget
Project

Program delays Little or no delay Short delay Significant delay Major delay Project halted major delay
Major

Duration increased >2% Duration increased >10% Duration increased >25% Duration increased >50%

Relationship - Managing Either party is irritated but no formal Resolved at working level Resolved at senior management level Departmental Head intervention Legal recourse initiated.
complaints
Contractor
#The consequence category for “Project Budget” may differ according to the overall value of the project itself. Likewise, the criteria for “Program Delays” may also vary depending on the specific Project deadlines.

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Appendix 3 – Project Risk Assessment Template
Project Title Period: March 2010

Project Description / Scope / Please describe the key aspects of the project to clarify the nature , background and scope of the project
Background

Risk Category Select the risk category Requirements Benefits Schedule Budget Deliverables Scope
being considered
Issues Suppliers Acceptance Communication Resource Other
Project Risks / Issues - Budget Consequence: Likelihood: Consequence Likelihood Rating:
 Consider a workshop during the “Risk  Quantitative and qualitative  List the issues that would affect the Rating:
E.g. Medium -Using
Planning” stage, involving each of the  List all the potential consequences of likelihood of the risk eventuating
E.g. High -Using the the scoring system
key project stakeholders (project each risk
sponsor, manager, team, suppliers, scoring system below, what is the
customer), to identify risks  List the consequences in $ terms, to below, what is the probability of the risk
enable better judgement in the decision potential impact of the eventuating
 List the likely risks, which may affect making process. E.g. The project
the project, consider each risk risk
exceeds the allocated budget by $500k
category Score: Score:
40 60

Current Controls (these are controls in place) Future Mitigating Actions Responsibility Action Date
 List all controls in place that would limit our exposure to the risk occurring (i.e.  List all Preventative actions (reduce possibility  List responsible  List due date for
reduce the likelihood of the risk occurring and reduce the potential consequence of risk occurring) and Contingent (reduce the persons for each each action
of the risk) impact) including estimated completion dates action
 How are these controls enforced (Who, when, how evidenced?) and accountability for each action.

Priority Risk Rating - Priority equals average of Likelihood and Consequence scores. After considering the above controls - in place 50 (ave of above) Moderate
only )

Matters for consideration List any other matters for consideration that are relevant to the decision as to whether the University should accept the risk
Issues for insurers For Risk Administrator to complete
Risk decision Accept, Mitigate, Transfer or Avoid
Prepared and recommended by: xxx Reviewed and endorsed by: Xxx
Date Date
Approved PVC Administration Date

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Appendix 3 - Project Risk Assessment Template continued
Risk Quantification
Table of Probability (Project Risks only)
Rating Score Description
Almost Certain 100 Highly likely to occur as the circumstances which will cause the risk to eventuate are also very likely to be created

Likely 80 Very likely to occur, based on the circumstances of the project

Possible 60 Likely to occur, as it is clear that the risk will probably eventuate

Unlikely 40 Unlikely to occur, based on current information, as the circumstances likely to trigger the risk are also unlikely to occur
Highly unlikely to occur; however, still needs to be monitored as certain circumstances could result in this risk
Rare 20
becoming more likely to occur during the project
Table of Consequence (Project Risks only)
Rating Score Description
Catastrophic 100 Major impact on the project, e.g. >25% deviation in scope, scheduled end-date or project budget.

Major 80 Significant impact on the project, e.g. 10-25% deviation in scope, scheduled end-date or project budget.

Moderate 60 Measurable impact on the project, e.g. 5-10% deviation in scope, scheduled end-date or project budget.

Minor 40 Minor impact on the project, e.g. <5% deviation in scope, scheduled end-date or project budget.
Insignificant 20 Insignificant impact on the project, It is not possible to measure the impact on the project as it is minimal
.

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Prioritising risks
The purpose of prioritising the risk is to determine the level of action needed for the identified and assessed risks. Establish the priority of each project risk by identifying the
probability of the risk eventuating and its impact on the project. The priority score is calculated as follows:

 Priority equals the average “Likelihood” and “Consequence” scores

 This is calculated as Priority = (Likelihood + Consequence) / 2

Table of Management Action (Project risks only)

Priority Score Action required
Extreme 81-100 Immediate Action Required (Executive management) Assign accountability

High 61-80 Executive Management attention required Assign accountability

Medium 41-60 Management by specific reviewing and monitoring of procedures (Managers) Assign accountability
Manage by routine procedures, unlikely to need specific application of resources (managers and
Low 0-40 Business as usual
key staff)
Risk Plan
The risk plan includes a set of actions to be taken to avoid, transfer or mitigate each risk, based on the priority of the risk assigned.
For each risk identified and in order of priority, list:
 Preventative actions – reduce the likelihood of the risk occurring.
 Contingent actions – reduce the consequence should the risk eventuate.

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Appendix 4 – Operational Risk Management Plan Template
Example only – not based on actual risks

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Appendix 5 - Glossary of Risk Management Terms
Consequence
The outcome of an event expressed qualitatively or quantitatively, being a loss, injury,
disadvantage or gain. There may be a range of possible outcomes associated with an event.
Control
Any action taken by management, the board, and other parties to manage risk and increase the
likelihood that established objectives and goals will be achieved.
Cost
Of activities, both direct and indirect, involving any negative impact, including money, time, labour,
disruption, and goodwill, political and intangible losses.
Contingency
Budget (cost benefit) or time (duration) that may be used in the event of a risk occurrence.
Event
An incident or situation, which occurs in a particular place during a particular interval of time.
Frequency
A measure of the rate of occurrence of an event expressed as the number of occurrences of their
event in a given time. See also Likelihood and Probability.
Hazard
A source of potential harm or a situation with a potential to cause loss.
Inherent limitations
Those limitations of all enterprise Risk Management Frameworks. The limitations relate to the
limits of human judgment; resource constraints and the need to consider the cost of controls in
relation to expected benefits; the reality that breakdowns can occur; and the possibility of
management override and collusion.
Inherent risk
High inherent risks that are well controlled may fall out of our field of view if only the residual risk is
assessed. The purpose of assessing inherent risk is to ensure that we maintain focus on
compliance with controls.
The inherent risk should be considered in the absence of the University added controls.
Likelihood
Used as a qualitative description of probability or frequency of a risk occurring.
Loss
Any negative consequence, financial or otherwise. Can be differentiated as follows;
 Maximum foreseeable loss- highest possible loss after considering controls
 Maximum possible loss – highest possible loss without considering controls
Monitor
To check, supervise, observe critically, or record the progress of an activity, action or system on a
regular basis in order to identify change.
Probability
The likelihood of a specific event or outcome, measured by the ratio of specific events or outcomes
to the total number of possible events or outcomes.
Reasonable assurance
The concept that enterprise risk management, no matter how well designed and operated, cannot
guarantee that an entity’s objectives will be met. This is because of inherent limitations in all Risk
Management Frameworks.
Residual risk
The remaining risk after management has taken action to alter the risk’s likelihood or consequence.
Risk
The possibility of an event occurring that will have an impact on the achievement of objectives.
Risk is measured in terms of consequence and likelihood.
Risk acceptance
An informed decision to accept the consequences and the likelihood of a particular risk.
Risk acceptance criteria
Management’s formal establishment of criteria or boundaries designed so that the residual risk
does not exceed the selected range of financial and operating outcomes.
Risk analysis

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A systematic use of available information to determine how often specified events may occur and
the magnitude of their consequences.
Risk appetite
The level of risk that is acceptable to the board or management. This may be set for the
organisation as a whole, for different groups of risks or at an individual risk level.
Risk assessment
The overall process of risk analysis and risk evaluation.
Risk avoidance
An informed decision not to become involved in a risk situation.
Risk evaluation
The process used to determine risk management priorities by comparing the level of risk against
predetermined standards, target risk levels or other criteria.
Risk identification
The process of determining what can happen, why and how.
Risk Management Framework
The totality of the structures, methodology, procedures and definitions that an organisation has
chosen to use to implement its Risk Management Processes.
Risk Management Processes
Processes to identify, assess, manage, and control potential events or situations, to provide
reasonable assurance regarding the achievement of the organisation’s objectives.
Risk Plan / Register
The means by which an organisation elects to manage or treat the individual risks. The main
categories are to accept the risk; to mitigate it by reducing its consequence or likelihood; to transfer
it to another organisation or to avoid the activity creating it.
Risk Register / Risk Management Plan
The summary report of all individual risks within each assessment, which include; risk ratings
(inherent, residual and targeted), level of control, risk decision, risk owner and summary of key
controls and/or mitigating actions.
Stakeholders
Those people and organisations who may affect, be affected by, or perceive themselves to be
affected by, a decision or activity.

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