Assuming the working group has done its job, you will have generated a long list of risks covering everything from someone stealing the petty cash, through to what would happen if your organisation were sued by one of its clients. The task now is to assess those risks according to how likely they are to occur, and how severe the consequences would be if they did occur. A useful approach is to use four categories of severity and four categories of likelihood. The four categories of severity are:

  • Disastrous risks
  • Very serious risks
  • Serious risks
  • Minor risks

The four categories of likelihood are:

  • Almost certain
  • Very likely
  • Likely
  • Unlikely

Remember, legal prescriptions must be complied with, no matter what the cost or inconvenience. The following section explains in some detail what each of the categories of risk severity entails.

Disastrous risks

The most serious risks include those that would result in death or serious physical injury. For example, while the likelihood of a staff member being killed by a client is low, it could happen and it is a risk which organisations should take into account.

Other very serious risks are those that would put your organisation's future survival in jeopardy. Organisations which rely heavily on public donations or volunteers would probably suffer a serious financial setback if their reputation were harmed for some reason. Similarly, poor financial controls can lead to situations where an organisation goes into liquidation.

Finally, people within your organisation face a range of personal liabilities by virtue of their involvement in the organisation. Staff providing professional advice, and board or management committee members, can potentially be sued for negligence if they are derelict in their duties.

Very serious risks

Next we have those risks that would result in a major reduction in the level of service your organisation can provide, or which would require a very significant use of your organisation's resources to recover from. Loss of premises, destruction or theft of essential files or vital equipment might all be included under this heading. For organisations which have responsibility for the care of at-risk groups of people, very serious risks might include the risk of repetitive abuse of clients by one or more staff members.

Serious risks

Serious risks include those that would result in a noticeable impact on your organisation, and which would require a significant use of your organisation's resources to recover from. Examples of serious risks include theft or damage to non-essential equipment, or the unanticipated long term absence of a senior member of staff. (For a small organisation, such an absence might even be an example of a very serious or disastrous risk.) Another serious risk could be the risk of staff or others breaching the confidentiality of a client.

Minor risks

These are risks which are easily covered in the day-to-day running of the organisation. Examples include minor theft of petty cash, accidental breakage of cheap office equipment, and so forth.

Use the categories outlined above (or create your own if you like) to go through the Risk List and fill in the columns `Severity' and `Likelihood'. Use the following code when filling out the columns.

D for Disastrous

1 for Almost certain

V for Very serious

2 for Very likely

S for Serious

3 for Likely

M for Minor

4 for Unlikely

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