Risk Management > Introduction

Asset and Risk Management

Risk Management includes the identification and management of the Museum's assets first before a risk management plan is fully developed. Here assets are not restricted to the physical assets of the Museum's collections and the financial assets. These also include intangible assets addressed under Stewardship. These intangibility assets include the Museum's intellectual capital including its organizational information, knowledge, and management practices; the stakeholder capital; and the valued-added capital of the collections, augmented through research, conservation and interpretation. These, too, must be managed. While these are addressed, the focus of this section involves an assessment and resources for risk management of the interior spaces and elements of the buildings.

Ideally, the Museum is able to practice proactive conservation and risk management to reduce the need for non-preventive treatment, and reduce the level of intervention necessary to mitigate physical and cultural loss caused by risk and correct the underlying cause(s).

For-profit enterprises work toward increasing their assets through risk management practices, which reference to the adage, "No risk: no reward," implying a recognition of risk yet associating greater levels of risk with increasing need/result of economic reward for shareholders.

For museum stewards, greater risk to the collections can not be justified by greater economic reward. The principles and equation must be different, yet also result in increasing reward to the stakeholder value of the collections.

For museum stewards the applicable adage is:

"Know risk. Know reward."

Here, knowledge of risk management practices will help reduce risk while concurrently increasing the reward to stakeholders:

  1. Staff, working for the Museum as a knowledge-based learning organization, who are trained in risk management, and play a proactive, participatory role in stewardship with an understanding of their performance-based responsibilities and rewards.
  2. The public, as stakeholders, who are engaged with value-based Society activities, which include active, ongoing interpretation of risk management through collections stewardship and preservation treatments.

Identification

  1. Review and incorporate added methodologies for risk management, including those developed by the Canadian Conservation Institute (see below, under Resources.)
  2. Identify tangible and intangible assets that are at risk.
  3. Inventory the physical assets (the collections), including an identification of the risks posed to specific/related collections.
  4. Assess in the context of Museum plans and policies, including a Information and Communication Management System.
  5. Identify and assess the underlying cause of the risk, not only the resulting conditions/pathology.

Quantify

  1. Understand and formalize the relationship between risk and change, with a monitored organization-wide risk-management framework to ensure consistency of approach.
  2. Understand and quantify (as some risks, in combination, are synergistic) combinations of risks and their interaction.
  3. Define specific risk threshold levels.
  4. Identify the severity of specific risk, assessed in terms of loss (economic, cultural, etc.) and probability or likelihood of occurrence.
  5. Integrate risk management with the goal of enhancing "stakeholder" value by shifting responsibility for risk management away from compliance to proactive, organization-wide holistic stewardship, and its interpretation to an engaged public.
  6. Develop a response strategy that favors preventive conservation to minimize the need for physical intervention to treat objects.

Manage Risk

  1. Identify risks that are in control and that can be managed.
  2. Identify risk that are beyond control and little can be done to manage them. Develop contingency, triage, mitigation and response plans.
  3. Address severity, which is the sum of its impact assessed in terms of collections and financial loss, and the probability or likelihood of occurrence.
  4. Develop management or response plan, with five options:
    1. Transfer the risk(and/or risk management) by transferring it to a third party that is in a better position to manage it.
    2. Avoid the risk by taking a different course of action.
    3. Reduce the risk by taking action that minimizes its impact or probability.
    4. Place some contingency in place that allows the Society to cope with the complications of risk, should it materialize.
  5. Accept the risk and its consequences.

References

Framework for Preservation of Museum Collections, Canadian Conservation Institute.

The Framework for Preservation of Museum Collections outlines various methods that can be used to avoid or control potential deterioration to museum objects. This online version is based on the popular wall chart available from CCI.

The rows list nine agents of deterioration that affect museum objects, and include the type of damage that each can cause. The first five agents (direct physical forces; thieves, vandals, and displacers; fire; water; and pests) are widespread throughout the world. The last four agents (contaminants; radiation; incorrect temperature; and incorrect relative humidity) are of particular concern to museums. The agents are listed in rough order of importance according to their potential for damaging artifacts. Each term chosen describes a destructive agent. For example, "temperature" in and of itself does not cause damage, but 'incorrect temperature' does.

"The columns present three different levels at which the agents of deterioration can be controlled: Building Features, Portable Fittings, and Procedures. Building Features and Portable Fittings are listed separately because they usually have different budgets and personnel, and because they are dealt with at different times in the life of a museum. Building Features and Portable Fittings are further subdivided by location of artifacts: on display, in storage, or in transit. The Procedures column outlines actions that can be taken by staff or contractors once the building features and portable fittings are in place.

A 19-video series on preventive conservation. Each chapter is the script of one of the videos. Subjects include an introduction to preventive conservation, storage, the condition report, relative humidity and temperature, the care of textiles, protecting objects on exhibit, emergency and disaster planning, and closing a seasonal museum.

Source: Large Matrix, Framework for Preservation of Museum Collections, Canadian Conservation Institute.


Framework for the Preservation of Museum Collections Wall Chart, published by the Asociaciòn para la Conservaciòn del Patrimnio Cultural de las Américas and the Library of Congress, under licence from the Canadian Conservation Institute. Available at Preventive Conservation and the Care of Collections.

This chart outlines various methods that can be used to avoid or control potential deterioration of museum objects. The rows list nine agents of deterioration (direct physical forces: thieves, vandals, displacers; fire; water; pests; contaminants; radiation; incorrect temperature and incorrect relative humidity), while the columns present three different levels at which the agent deterioration can be controlled: the building (architectural or engineering elements), portable fittings (items or modifications that are generally purchased on an operating budget), and procedures (actions that can be carried out by museum staff). The procedures column outlines actions that can be taken.

Damage and Decay, Volume Three (Light and Ultraviolet Radiation, Humidity and Temperature, Biological Pests, Dust and Pollutants, Common Deterioration Processes), reCollections: Caring for Collections Across Australia, Commonwealth of Australia on behalf of the Heritage Collections Council (2000).
http://amol.org.au/recollections/3/index.htm

Resources

Rayner, Jenny. Managing Reputational Risk. New York: John Wiley & Sons, 2003. [Amazon]

This book shows how any organisation can apply simple risk management principles to build stakeholder confidence and safeguard and enhance reputation. It positions reputation and its associated threats and opportunities where they rightfully belong: in the domain of the board room, at the heart of good corporate governance, leading-edge strategy development, effective risk management, corporate responsibility, comprehensive assurance and transparent communications. It illustrates, through numerous examples of good - and not so good - business practice, the importance of respecting and nurturing reputation as a critical intangible asset. It demonstrates how mastery of reputation risks can enable an organisation to be seen as responsible and responsive, as well as equipping it to meet the challenges that lie ahead.

Herman, Melenie , George L. Head, Toni E. Fogarty, and Peggy M. Jackson. Managing Risk in Nonprofit Organizations : A Comprehensive Guide, John Wiley & Sons, 2003. [Amazon]

This book explains and defines risk management, especially as it applies to nonprofits. It provides comprehensive guidance on such topics as identifying risk, prioritising risk, selecting appropriate risk management techniques, implementing risk management techniques, monitoring risk management, and financing.

Frame, J. Davidson. Managing Risk in Organizations : A Guide for Managers. Jossey-Bass, 2003. [Amazon]

This book offers a proven framework for handling risks across all types of organizations. In this comprehensive resource, the author examines the risks routinely encountered in business, offers prescriptions to assess the effects of various risks, and shows how to develop effective strategies to cope with risks. In addition, the book is filled with practical tools and techniques used by professional risk practitioners that can be readily applied by project managers, financial managers, and any manager or consultant who deals with risk within an organization.

Borge, Dan. The Book of Risk. New York: John Wiley & Sons, 2001. [Amazon]

In this book, one of the most highly regarded industry experts illuminates the delicate process of making decisions in an uncertain world and helps both lay people and professional risk managers understand the role of "risk-management" in their work, their lives, and their businesses. This book will enable professional risk managers to truly grasp the concepts behind their tools, and it will enable their clients (investors) and their coworkers to understand them as well. Handy and easy-to-read, this book provides a down-to-earth look at an exciting field that has practical applications for everyone.

Schreider, Tari. Encyclopedia of Disaster Recovery, Security & Risk Management. Crucible Publishing Works, 1998. [Amazon]

Crucible Publishing Works announces the release of the long awaited second publication from disaster recovery and risk management expert Mr. Tari Schreider. The Encyclopedia of Disaster Recovery, Risk Management & Security is a 300+ page spiral bound manual, which provides over 2,000 pieces of research on the subjects of disaster recovery, risk management and security. The Encyclopedia is a comprehensive reference guide organized by easy to follow icons allowing quick navigation to areas of specific interest.

 

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