Home' RMIA : RMIA 2015 Contents 48
implementation of treatment strategies, but also creates
discipline in monitoring and review arrangements. The effect
of this is to enhance resilience at a foundational level, and
create a vehicle for better risk management that transcends
social, governmental and business boundaries.
Risk Health, so called because it highlights how 'healthy'
an entity's management of risk is, is a composite of two
distinct metrics. The first of these is Risk Proximity; the
second is Treatment Implementation Status.
Risk Proximity is not particularly novel, having been
applied in one form or another in a variety of contexts (for
example, replacement schedules for car parts as part of
routine servicing). But for present purposes, the measure
of proximity is taken to be the amount of time between
the present and some future 'peak risk period'. Peak risk
period is the point in time at which the assessed likelihood
and assessed consequence intersect. One example of
this is bushfire risk. In Australia, bushfire risk for the south-
eastern part of the country might be described as 'high' to
'extreme'; however, in practice, the risk of bushfire only truly
approaches this level from October through to March. Thus,
the peak risk period for bushfire commences in October.
Interestingly, this measure of peak risk period is similarly
applicable to program and project risk, policymaking and
transformative change initiatives.
Peak risk period can be quantitatively modelled or
qualitatively described, and can exhibit several general
distributions. For example, a peak risk distribution might be
described as exhibiting a 'trailing peak risk period', and is
characteristic of a profile that would apply to bushfire risk at
the conclusion of the bushfire season.
Alternatively, the peak risk distribution might be described
as exhibiting a 'leading peak risk period', which is typical
of the peak risk distribution for an information technology
system's rollout, where the uncertainty is at its greatest
during the initial production and early implementation
phase, then tapers off as the capability matures.
Some peak risk distribution profiles are fairly uniform across
time. This might be said of work health and safety risk for
certain occupations, where there is a constant likelihood of
a given level of harm, independent of time.
Finally, the peak risk profile can be bi-modal (or even
multimodal). That is, the risk exhibits peaks throughout the
year. This kind of distribution can be observed in south-
western Australia, where bushfire risk peaks in October to
February, and again for a short period in April due to pole
top fires that occur at the first onset of moist weather.
By calculating the time between the present and the
beginning of the next peak risk period, proximity can be
derived. The only exception to this is where the peak risk
distribution exhibits a uniform profile. In this case, the peak
risk period is taken to be the next formal full risk review,
which is equivalent to the limit of validity of the current risk
assessment. In addition, proximity can be rated, which will
be used later in the process to plot Risk Health.
Treatment Implementation Status
Treatment Implementation Status is what (in project terms)
would be called 'project status'. It is the extent to which the
next treatment plan due is either on track, has a chance of
failing, or is overdue. It is important to note that 'treatment'
in this context is defined as a measure that modifies the
level of likelihood and/or consequence, and that is yet to
be fully implemented. By calculating the time between
the present and the next treatment due date, Treatment
Implementation Status can be derived.
A key point to note is the assumption that treatments
are only mandated for risks that exceed tolerance. In
this respect, some risks will exhibit a residual rating that
does not exceed tolerance, and therefore will not have a
mandated treatment plan. Where this is the case, the next
treatment due date equates to the next scheduled routine
Peak risk period
is the point in
time at which the
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