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Murdoch University Senate

 

 

Senate

Risk Management at Murdoch University 

Background
  1. The background to Risk Management at Murdoch University is as follows -
a)  On 10/9/01 the Senate endorsed a Risk Management Plan and required the Audit Committee "to ensure Risk Management issues are being adequately addressed within the University".
b)  A Director, Office of Internal Audit and Risk Management was appointed on 29/4/02.
c)  The Director met with all the Senior Managers to introduce the general concepts of Risk Management.
d)  The Senate on 19/8/02 approved the implementation strategy and timetable for Risk Management.

Who has responsibility for Risk Management and for how long ?
  1. Every employee of Murdoch University has an ongoing responsibility for Risk Management, however the Senate and the Senior Executive Group have a special role in providing leadership and ensuring that risks are effectively managed.

What is the role of the Director, Office of Internal Audit & Risk Management ?
  1. The Director, Office of Internal Audit and Risk Management is responsible for –
a)  facilitating the production and review of the University’s Risk Management Plan. b) tabling the University’s Risk Management Plan to the Audit and Risk Committee for their annual review and approval.
b)   making an annual presentation to the Senate on Risk Management.

What is the role of the Audit and Risk Management Committee of Senate ?
  1. The Audit and Risk Management Committee is required, by its Terms of Reference 1 (e), " to ensure on behalf of the Senate that risk management issues (financial, legal, ethical, reputation or other risks for the University) are being adequately addressed within the University including monitoring risks associated with legal action taken against the University and complaints lodged with the Human Rights and Equal Opportunities Commission and similar bodies".

What is Risk ?

  1. Risk is the chance of something happening that adversely affects our ability to achieve our corporate goals. Risk is measured in terms of consequence and likelihood.

  2. It may be suggested that risk prevents organizations from pursuing various options. This is not always the case as there can be risk associated with not taking opportunities as they arise.

What are some examples of risks ?
  1. Risks that may impact on Murdoch University include -

* Political

* Funding

* Customer Service

* Reputation

* Conflicts of Interest

* Academic Quality and Integrity

* Intellectual Property

* Business Continuity

* Competition

* Technological

* Legal

* Utilisation of physical, human, financial and intellectual assets

* Industrial Relations

* Fraud

* Occupational Health and Safety

* Asset security

What are the benefits of managing Risks ?
  1.  Risk Management is a worthwhile business practice as it enhances our ability to achieve our corporate goals.
  9.  When risks are prioritised from high to low importance, a manager may discover they are spending a disproportionate amount of time on lower risk areas. As a result, scarce resources may then be reallocated to higher risk areas or to other worthwhile pursuits.
 10. A final benefit of Risk Management is that it meets community and customer expectations, it represents good corporate governance and meets the requirements of the WA Treasurer’s Instructions 109.

Is Risk Management difficult and will it involve significant new work ?
 11. Risk Management is not difficult and most people do it informally in both their private and professional lives. The only additional effort should be in the documentation of risk information, with some of this information already having been developed for reviews such as -

a) reviews by the Quality Agency of Australian Universities ; and

b) Academic reviews of Schools

On what basis will Risks be identified and prioritized ?
 12. The AS4360 Australian Standard on Risk Management will be used to identify, measure and prioritise risks. This standard calculates Risk by taking account of likelihood and consequence. This methodology will be used throughout the University to achieve a uniformity of approach. Similarly, a software package will be used throughout the University to record and report all Risk Management information.

What are the options in Risk Management ?
  1. Having identified and prioritized risks, Organisations can either –

a) accept the current level of risk ;

b) transfer the risk through insurance or contractual arrangements ;

c) eradicate the risk ; or

d) further reduce the risk.

 14.  In considering risk management options, Organisations take into account cost benefit considerations. Normally the eradication of particular risks may not be an option as it would be cost ineffective.

How is Risk Management activity to be monitored ?

  1. When each of the 7 University divisions finalise their Risk Management Plan they will be formally signed off by the respective heads of those divisions. They will certify that -

a) their plan is complete and accurate ; &

b) they are reasonably managing their major risks.

The Vice Chancellor will review and approve these certifications and table them at the next meeting of the Audit and Risk Committee.

  1. Every year thereafter, the Division heads they will provide a similar certification. These certifications will be tabled at the Audit and Risk Management Committee meeting for their review and approval.

What is needed for a successful implementation of Risk Management ?
  1. The critical success factor in the implementation of a Risk Management Plan is the ongoing commitment from senior management and the Senate and the Audit and Risk Committee.

Benchmark Information

  1. I have discussed Risk Management with Monash University, Melbourne University, the other WA Universities, Wesfarmers and the Department of Land Administration. The Risk Management activity of most Australian Universities is on Occupational, Safety and Health issues and insurance coverage. Murdoch University adopts a broader and correct approach to Risk Management.

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Modified by: Helen Yeoman, Administrative Secretary, University Secretariat, Vice Chancellor's Office
URL: file:///c:/work/senate/2002/oct/rmamu.html

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