Evaluating Residual Risk

Residual Risk

My last blog discussed how the ‘Risk Rating’ tool can be used to quantify risk by determining a number signifying just how risky a program or facility is. By applying a series of risk management controls, it is then possible to reduce this number and hence reduce the risk.

The Risk Rating you end up with after implementing controls is often referred to the ‘Residual Risk’ – the risk that is left over. The reality is that you will never eliminate risk – so your objective should be to reduce it as much as possible – within reasonable limits. (In other words, while there may be additional controls that can be implemented, they may be just too expensive or simply not reasonable).

At this stage, you are now faced with the question – is this ‘residual risk’ too high? This is where you need to seek input and advice:

  • Discuss with your Risk Management Committee (and/or Director)
  • Seek input from the institutional Risk Manager (after all, it is the institution that will likely have to settle any claim for damages – hence it may be wise to determine if they think the risk is just too high).

Given the fact that you cannot eliminate all risks, and also that some people participate in some activities because of the risks involved, an institution will generally have to ‘eat’ some of the risks – otherwise programs and activities will never be offered. (Note that this is one of the reasons there are insurance plans in place to deal with damages, which may be unforeseeable.)

But there is a fine line between ‘safe’ and a point where the residual risk is just too high to be reasonably managed by an individual or department – and this is why there needs to be a broader discussion with others in the department (and across campus) to ensure that you are not taking on too much risk.

The Risk Rating exercise is a useful tool – not only when looking at potential new programs and activities, but also in re-evaluating current offerings. Often circumstances change in a department e.g. new personnel, new facilities etc. and something that was deemed manageable yesterday might not be manageable today.

In addition, splitting programs and activities into their components can often become an eye-opening exercise, in that it can expose specific vulnerable areas, which could be the cause for alarm.

For example, a badminton club would likely fly under the radar when viewed through the Risk Matrix lens and also during a preliminary Risk Profile review – unless you split badminton into components. Hence, while the physical contact nature of the sport is no real cause for concern, the fact that the club travels each weekend to compete elevates this club to a totally different risk level.

For some programs, segmenting into components may help pinpoint the specific area of concern e.g. a program which you believe to be high risk may in fact be safer that you think, since it is only one or two components of the program that are high risk. Hence focusing on these high-risk components will result in lowering the overall risk.

It is important to acknowledge the subjectivity and limitations of the Risk Rating approach. However, it can act as a powerful tool to help quantify risk – and thereby initiate discussion around your ability to manage it.


Dr. Ian McGregor is President of SportRisk, providing risk management consulting services to Campus Recreation departments at Universities and Colleges across North America.

Emily Harbourne was a previous editor for Campus Rec Magazine.

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