Developing and Implementing a Risk Management Framework

The development and implementation of a Risk Management Framework (RMF) can assist in understanding the potential implications of selected options and evaluating between economic impacts and environmental and health benefits in deciding on fire protection initiatives. Quantitative risk assessment techniques may be used as part of an overall RMF or risk management strategy.

RMF's are a description of an organization's specific set of functional activities and include associated definitions that specify the processes to be used to manage risks. Shortreed et al. provide a comprehensive description of RMF's, stating that:

A good RMF should enhance and improve risk management by:

Making it more transparent and understandable to stakeholders

Making its processes more efficient

Allowing for sharing of best practices in the implementation of risk identification, risk assessment and risk treatment

The specific steps involved in developing a methodology include the following:

A clear definition of the risk elements to be considered. For example: Wind conditions, mechanical failure, human error, local environment, accessibility to fire fighting resources.
Identification of governing codes and local regulations.
Recommendations of elements to be included in a risk model.

One of the primary objectives is to ensure a balance between the need to address any environmental, technical or economic issues with the need for compliance with regulatory, legislative and corporate requirements in each jurisdiction.

There are several best practices to draw upon from other jurisdictions and organizations in the development of a RMF. The formulation of these into an organization's specific RMF methodology often results in a new and unique outcome and will require an understanding of both the technical issues and how to effectively implement such a framework within the organization.

There are several approaches available, including the decision-making framework described in the CSA-Q850 Risk Management Standard (see CSA Q850 Risk Management Guidelines for details). Although a less formal approach may be adopted, the application of such a standard provides support and additional legitimacy for the decision making process. The specific steps involved are described in further detail below.

Key Steps in the Risk Communcation Process

Initiation

To confirm the objectives and scope of the project, potential stakeholders and the project schedule.

Preliminary Analysis

The preliminary analysis will consist of the development of an initial RMF tool, including an examination of relevant risk elements, weighting factors and criteria and recommendations for elements to be included in the model.

Risk Estimation

Quantitative risk assessment techniques may be used to provide further refinement of the risk estimation process and prioritization of mitigation strategies. Use of a risk ranking matrix (Figure 1) may be used to assess the relative severity of a potential incident.

Consequences

(people / assets / environment / reputation)

Likelihood

Very Unlikely

Unlikely

Occasionally

Likely

Very Likely

None


Acceptable with controls

		Undesirable

		Unacceptable

Slight

Minor

Moderate

Undesirable

Major

Figure 1: Example risk ranking matrix

Risk Evaluation

Risk evaluation includes integrating cost information for the various options within the RMF and evaluating the efficacy of using the framework to assist in the decision making process.

Risk Control

Application on selected test or pilot projects, including an evaluation of acceptance of the application of the tool and acceptance of the results.

Action / Monitoring

Implementation of the selected risk management strategy and the establishment of a monitoring plan, including a process to identify issues associated with implementation, monitoring and compliance and development of a monitoring process or frame work to maintain this tool in-house.

The Accident Wheel: when the right conditions are met, an accident happens
Figure 2: The Accident Wheel