Church risk management involves identifying, analyzing, treating and monitoring the risk involved in any church process or activity. Risk is the probability of an undesirable event or outcome during or as a result of a process or activity. |Church risk management is important since it would enable the church best optimize the use of the resources it has and also protect the assets from being lost. The church risk management process involves seven distinct steps of establishing the context, risk identification, risk analysis, evaluation, risk treatment, monitoring and review, communication and consultation. The process begins again and it is usually depicted as a circle.
- Establishing the context- This involves establishing the processes and the risks inherent with every process. It is also important to define the priority processes and plan, for example, holding a service would have many processes, holding the service is a priority activity for the church and therefore the context of the risks related to processes holding a service should be established
- Risk identification- Identifying the risk involves identifying the stakeholders of the process and how the process would affect each one of them. Using our example of the service, the service would have stakeholders like the members of the congregation, the pastors, ushers, and the choir among others. Each of this group would have certain requirements and parts to play in the whole service and so there is risk if any of the stakeholders is affected by any sort of risk.
- Analyze the risk- This involves determining the probability of the undesirable event happening and the magnitude of the loss that would result from such loss. For example, what is the likelihood that the day’s preacher will not be able to give a sermon, what is the impact of that to the service? This would involve listing all the possible scenarios and their outcomes e.g. the preacher could fall ill, have an accident, or any other scenario that would make him not be able to deliver the sermon should be put down.
- Evaluate the risk- This involves prioritizing the risks depending on the rate of occurrence and the magnitude of the loss if the unfavorable events occur. E.g. what is the likelihood that a preacher would fall ill during a sermon? What impact will this have to the service? Is this a priority risk management issue? Does it rank before the choir master falling ill? These questions form the basis of evaluating the risk.
- Treat the risk- This involves putting up measures both operational and resources for defense against the risk perceived. After evaluating the risks, a priority list would be drawn and measures to treat the risks would be put up according to the priority list. For example in the case of the service, if delivering of the sermon is more pressing than the choir, then measures for the sermon being delivered would be taken first e.g. have a back up preacher. This should be documented and reasons for choosing a particular risk clearly defined. Some treatment for risks includes risk avoidance, hazard prevention, risk reduction, risk sharing.
- Monitoring and review- When identifying, evaluating and treating risks certain assumptions are made, these assumptions may need evaluation as the church changes and also as resources increase or decrease. Monitoring involves checking the processes to make sure that the risk attributed to them is real or imagined.
- Communicate and consult- This involves getting feedback from the stakeholder on the risk management process. It creates an avenue for reviewing the context of existing risk management measures.
Church risk management is a key process in understanding the threats inherent to the church and how to deal with them.