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Event Management

Notes

Task Understand the contents of an event risk audit.

6.6 Risk Management

The process of identification, analysis and either acceptance or mitigation of uncertainty in
investment decision-making. Essentially, risk management occurs anytime an investor or fund
manager analyzes and attempts to quantify the potential for losses in an investment and then
takes the appropriate action (or inaction) given their investment objectives and risk tolerance.
Inadequate risk management can result in severe consequences for companies as well as
individuals. For example, the recession that began in 2008 was largely caused by the loose credit
risk management of financial firms.

Simply put, risk management is a two-step process - determining what risks exist in an investment
and then handling those risks in a way best-suited to your investment objectives. Risk
management occurs everywhere in the financial world. It occurs when an investor buys low-
risk government bonds over more risky corporate debt, when a fund manager hedges their
currency exposure with currency derivatives and when a bank performs a credit check on an
individual before issuing them a personal line of credit.
We always have observed two kinds of risk at big sports events, i.e. Operational risk, that is the
risk of not being able to deliver (some venues), and other one is reputation risk.

6.6.1 Event Crisis Management

The identification of threats to an organization and its stakeholders, and the methods used by
the organization to deal with these threats. Due to the unpredictability of global events,
organizations must be able to cope with the potential for drastic changes to the way they
conduct business. Crisis management often requires decisions to be made within a short time
frame, and often after an event has already taken place. In order to reduce uncertainty in the
event of a crisis, organizations often create a crisis management plan.
Unlike risk management, which involves planning for events that might occur in the future,
crisis management involves reacting to an event once it has occurred. An oil company for
example, may have a plan in place to deal with the possibility of an oil spill, but if such a disaster
actually occurs, the magnitude of the spill, the backlash of public opinion and the cost of cleanup
can vary greatly and may exceed expectations.
“Crisis is a process of transformation where the old system can no longer be maintained.”
Therefore the fourth defining quality is the need for change. If change is not needed, the event
could more accurately be described as a failure or incident.
Crises come in all shapes and sizes – from flood and famine, earthquake or pandemic to smaller-
scale but nonetheless challenging events such as a building collapse, fire, rail crash or localised
outbreak of an infectious disease. Preparing to deal with national and local emergencies does
not have to be expensive. A simple, well-thought-out crisis management plan, at a national or
local level, can save lives and enhance reputations nationally and internationally – particularly
in a world where real-time global media is ever-critical. It is also an essential ingredient of
effective and responsible modern governance.

Crisis management is the process by which an organization deals with a major event that
threatens to harm the organization, its stakeholders, or the general public. Three elements are
common to most definitions of crisis:

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