Risk Management Presentation to Doyle Property Club
- 1. Vertice Development Management RISK MANAGEMENT IN CONSTRUCTION & PROPERTY DEVELOPMENT Marc Preston Doyle club 5th June 2014
- 2. RISK MANAGEMENT IN CONSTRUCTION & PROPERTY DEVELOPMENT Part 1 Marc Preston – Risk management overview and Guide
- 3. 80% of EFFORT TO SORT OUT PROBLEMS AFTER THEY HAVE OCCURRED 80% of EFFORT DEDICATED TO AVOID PROBLEMS OCCURRING IN THE FIRST PLACE
- 4. What are we going to discuss? • What is risk Management? • Whose it for? • When do you do it? • How do you do it?
- 5. Why bother? Historically in financial institutions, risk functions such as legal, compliance, audit, credit risk and market risk Operational risk was generally the responsibility of business units as part of their daily activities. Risk management was focused primarily on financial, predictable and quantifiable risks related to loss prevention. Since the 1980s, risk management has evolved to include corporate governance, alignment to strategic objectives, capital adequacy and stakeholder value. Additionally, regular discussions on risk management started appearing on corporate board agendas.
- 6. NO WONDER FEW BOTHER !!!! Complex Event Processing – Analysing streams of information from multiple sources and deriving a conclusion Monte Carlo simulations- essentially calculation of probability using computer algorithms
- 7. Occam's razor (also written as Ockham's razor from William of Ockham, and in Latin lex parsimoniae) is a principle of economy, or succinctness used in logic and problem-solving. It states that among competing hypotheses, the hypothesis with the fewest assumptions should be selected. The razor states that one should proceed to simpler theories until simplicity can be traded for greater explanatory power. The simplest available theory need not be most accurate. Occam’s Razor KISS KEEP IT SIMPLE STUPID !!!!!
- 8. Broad spectrum of people in our industry
- 9. ISO 31000:2009 can be applied throughout the life of an organization, and to a wide range of activities, including strategies and decisions, operations, processes, functions, projects, products, services and assets. ISO 31000:2009 can be applied to any type of risk, whatever its nature, whether having positive or negative consequences. IS THERE A STANDARD?
- 10. ISO 30001 – What does it say ? Risk management; “coordinated activities to direct and control and organization with regard to risk” Risk management process; “systematic application of management policies, procedures and practices to the tasks of communication, consultation, establishing the context, identifying, analysing, evaluating, treating, monitoring and reviewing risk”
- 11. ISO 31000:2009 provides generic guidelines for the design, implementation and maintenance of risk management processes throughout an organization. The scope of this approach to risk management is to enable all strategic, management and operational tasks of an organization throughout projects, functions, and processes to be aligned to a common set of risk management objectives. ISO 31000:2009 is intended for a broad stakeholder group including:executive level stakeholders appointment holders in the enterprise risk management group risk analysts and management officers line managers and project managers compliance and internal auditors independent practitioners. ISO 30001 – What does it say ?(2)
- 13. WHY ME? •Collaboration •Single team •Be ( Now constucting Excellence) “Guide to Risk Management” Heathrow Express
- 16. What is Risk Management A systematic approach to the identification, prioritisation and elimination of risk
- 17. Whose it for? All Clients and all developments and schemes involve some degree of risk
- 18. When do you start? At the earliest possible moment. This process provides the Client with an opportunity to ensure his scheme is aligned with his business plan and he achieves his objectives in a controlled manner
- 19. What do you do? 1. Identification 2. Prioritisation 3. Give Ownership 4. Draw up action plan 5. Decide objective 6. Decide date for action 7. Review progress & actions 8. Seek and gather feedback 9. Keep live, flexible & responsive to change 10. Record outcome for future use
- 20. What do you do? Brain Storming Involve all Parties
- 21. What do you do? Lots of ways to do this e.g. Monte Carlo simulations But best way is to score out of 20 the following •Likely impact •Likelihood of occurrence •Use of common sense
- 22. What do you do? Likely impact • Monetary • Descriptive – Catastrophic, critical, serious, irritating, minor problem Likelihood of occurrence • Highly likely, More likely, likely, might happen, unlikely
- 23. Quote taken from Linkedin Risk Management Group
- 24. What do you do? Unless a Company and an individual is allocated a risk to manage it will not happen The person / company allocated a risk must be the person best able to manage it
- 25. What do you do? Must be CLEAR and SMART ( specific, measurable, agreed, realistic & time framed Costs involved, (if any), must be understood Be clear on objective –risk to be shared, passed on, eliminated, insured, controlled
- 26. What do you do? Regular reviews are essential of top priority risks say for this month & next month
- 27. What do you do? The risk process must be able to add new risks, change priorities & respond to changing circumstances A record of solutions should be kept to build a database for future use
- 28. Item No Description of Risk Prioritisation (Score A & B out of 20) Ownership Action Probability of occurrence (A) Likely Impact (B) Risk Score (AxB) Company Name Cost (£) To be done (Date) Feedback FURTHER ACTION THE RISK REGISTER – SAMPLE FORMAT