WHY
RISK MANAGEMENT?
Before answering the question of why a sport should embrace a risk management program, perhaps we should first define "risk management".

The Australian/New Zealand Standard (AS/NZS 4360:1995) defines risk management as "the systematic application of management policies, procedures and practices to the task of identifying, analysing, assessing, treating and monitoring risk."  The Standard also defines risk as the chance of something happening that will have an impact on objectives.

Risk is not necessarily harmful as it can lead to benefit or it can lead to loss.  Risk management is as much about identifying opportunities as avoiding or alleviating loss.

So, with these definitions in mind, risk management can be seen as simply a method of management aimed at controlling uncertainty to maximize profit (and minimize the chance of loss).  instead of a sport asking "why" it should embrace a risk management program, perhaps a more appropriate question is "how can a sport afford not to have a risk management program in place?"

Insurance provides a valuable safety net as a means of financing risk, but insurance by itself does absolutely nothing to reduce the likelihood of an event occurring

It is the reduction and control of risk which is paramount.

In view of this IEA, which has been providing insurance to Australian sporting bodies since 1978 and  has extended its services to sport to include the much broader area of risk management, not just the insurance component.

 IEA works alongside the sport in a facilitative capacity, working through the risk management process to achieve a living program which is embraced by all within sport and becomes part of the sports culture.

A successfully implemented risk management program ensures the sport systematically applies management policies, procedures and practices to the task of identifying, analysing, assessing, treating and monitoring risk.

The result is a "safer" sporting environment for all involved, not only from the perspective of physical injury or damage, but also including the legal, financial and ethical viewpoints.  As an added benefit, the successful implementation of a risk management program will ultimately minimise the cost of the insurance safety net.
                                                     Written by Rod Hughes
                                                                       Winter 1997

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