Risk Management for Events

Julia Rutherford Silvers, William O'Toole

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000299236
• Edition: 2
• Topic: Business
• Subtopic: Industria dell'ospitalità e del turismo
• Index: Business

Risk Management for Events is a comprehensive and practical guide that supports academic and professional development programs to prepare individuals for entering or advancement in the international events industry.

Events of all types are produced every day for all manner of purposes, attracting all sorts of people. Creating and managing the environment in which these people will gather carries with it awesome responsibilities — legal, ethical, and financial. To provide a safe and secure setting and to operate in a manner that ensures that the hosting organizations or individuals achieve their objectives in a proper and profitable way, event risk management must be fully integrated into all event plans and throughout the event management process.This new edition has been revised and updated to include:

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• New case studies and examples from a wide range of international destinations and different types of events.

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• Updated statistics and data throughout.

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• New content on emergent risk, on-site decision-making, terrorism, and public health, including the COVID-19 pandemic, and corruption within events.

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• Updated online material, including a case study archive and weblinks to useful resources.

This will be an invaluable resource for all those studying events management.

Part
1
Understanding risk management

Awareness is the first step

What could be risky about an event? Events are fun! They’re all about gathering together to interact, celebrate, be entertained, and learn new things. They are something to do, somewhere to go, something to look forward to.

One of the problems with problems is that if they don’t occur, then people feel they would have never occurred. We have all experienced a “near miss”. Fortunately, it gives us a jolt to be more careful. But with thousands of people at an event, dancing, talking, meeting new friends, a near miss is more likely to be a hit. As event organizers we cannot afford to let this happen.

Risk management is one of the primary responsibilities of event organizers, yet so often it is ignored or misunderstood, particularly by inexperienced planners because, like my now-paranoid event-goers, one can’t envision what one has not been exposed to – they don’t know what they don’t know. The two chapters in this section will show you how and why risk management is a fundamental component of event management and introduce you to the functions of risk management within the overall field of events management and the tools you may use to perform these functions effectively.

1
The role of risk management for events

Risk and opportunity are two sides of the same coin

This chapter will examine how to:

• Understand the nature of risk and the risk factors typical to events such as concerts, meetings, festivals, exhibitions, and other gatherings
• Recognize and relate the goals of risk management to the role and scope of events and its management
• Integrate the scope of risk management throughout the event management process

Introduction

Risk management is increasingly identified as a priority in today’s world. It is also coming to the forefront of the events sector, recognized in varying degrees as a key component of the responsibilities associated with the planning and producing of events. Some events celebrate the very pursuit of risk, seeking the excitement of potentially dangerous or lucrative outcomes, while others may operate without an appreciation or even an understanding of the liabilities associated with their endeavors.

Risk management is often perceived as a function that is carried out once an event has been conceived, designed, and organized. Risk management, however, should be thoroughly embedded in the event design and throughout its development and production process to ensure the risks associated with the event are managed effectively and cost efficiently.

In reality, the risk manager is often brought into the event management process after a great many decisions have been made, and his or her job then becomes finding ways to mitigate the potential negative outcomes that might arise with the event as designed. The more the risk manager knows about the event management process and the events to be managed, the more likely he or she will be included early in the process and be more influential in creating an event that delivers on expectations yet minimizes unfavorable consequences.

Armed with a thorough understanding of the risks surrounding events of all types, the risk manager will be able to provide compelling reasons and creative solutions for each event and its specific risks.

Risk, management, and risk management

Risk is the unknown and the positive or negative outcomes that may be associated with the unknown. It is a possibility – the possibility that something good or something bad might happen and the exposure to the possibility of loss, damage, or injury arising from an uncertainty. Risk is any condition or occurrence that might affect the outcome of an event or event activity and might expose an event organization to loss measured in terms of probability and consequences. Not all risk is bad. An event itself is a speculative risk; its production incurs liabilities yet has the potential for economic, political, and/or social rewards. One needs to look at the worst that can happen and the best that can happen in order to be prepared for anything in between.

• Speculative risk: the possibility of loss and the possibility of gain.
• Absolute risk: the possibility of loss and NO possibility of gain.

Management is the planning, organizing, directing, and controlling of resources and activities to achieve goals and objectives. Risk management is the purposeful recognition of and reaction to uncertainties with the explicit objective to minimize liabilities and maximize opportunities using a structured approach and common sense, rather than avoiding the issue (see Figure 1.1). The risk manager looks at all the vulnerabilities, including financial and professional vulnerabilities, and the threats to property and life and limb (see Table 1.1), and makes and carries out decisions that lessen the effects of potential losses.

As the progenitor of the science of event risk management, Alexander Berlonghi, pointed out, the goals include the protection of assets, to minimize legal and financial liabilities, to control potential loss, to properly manage growth, and to operate responsibly. The focus areas of risk management include legal and ethical responsibilities, health and safety, loss prevention, emergency preparedness, and good decision-making. The tactics of risk management include exposure avoidance, loss prevention, loss reduction, contractual transfer, and exposure retention. The role of risk management is to prevent and reduce loss by making events as safe and secure as possible.

The literature on risk management is often presented in the context of insurance coverage and legal liability – loss prevention and loss control. While this is an important perspective, particularly to the success and sustainability of events and their hosts and hosting organizations, it is equally important, if not more so, to put this practice in the context of the health and safety of those who come together to create, operate, participate in, and attend these public and private assemblies. It is not unusual to approach the subject from the ‘loss’ perspective because when people are injured or killed and property is lost, damaged, or destroyed, the result is usually the assigning of blame and the seeking of compensation. The financial assets of the event organization are protected when the potential losses are prevented or controlled.

Figure 1.1 Risk cognition tree

Table 1.1 Dimensions of risk

What is at risk?	What are the risks?
• People • Property • Finances • Systems • Environment • Image	• Bodily injury or death • Property loss or damage • Reduced revenue • Reduced capacity or capability • Resource availability • Increased demand • Loss of goodwill or reputation

The risk factors typical to events

The risk factors listed in Table 1.2 represent many of the risks associated with events. This list is by no means comprehensive. It does not illustrate all the risks that may occur at events, and not all of these risk factors will be pertinent to all events. In addition, the relative severity of the risks will be different in different contexts and different event genres. What should be apparent from this list is that inexperience, lack of expertise, and insufficient planning and resources have a significant impact on the level of risk associated with an event. This expands exponentially as the size and scope of the event increases.

Table 1.2 Typical event risk factors

Activities	• Hazardous activities and attractions • Food safety and alcohol service • Program, performers, participants
Audience	• Audience demographics, history, conflicting segments • Crowd size and density • Crowd behavior
Communications	• Untried or insufficient communications • Lack of command center and control • Insufficient equipment and signage
Compliance	• Regulatory permits, licenses, approvals • Unauthorized, unsanctioned, illegal activity • Inadequate cooperation with authorities
Emergency planning	• Inadequate crisis management plans • Lack of emergency response coordination • Deficient disaster contingency plans
Environment	• Atmospheric conditions, weather dependency • Terrain, flora, fauna • Vicinity and proximity to hazards
Event planning	• Inexperienced, inadequate, or incompetent management • Oblivious to external conditions • Lack of policies and procedures
Event type and purpose	• First-time, one-time, or controversial events • Lack of admittance controls and credentials • Misrepresentative promotion
Finances	• Insufficient funding, insufficient insurance • Improper procurement practices • Vulnerable cash handling procedures/areas • Changes in international exchange rates
Human resources	• Insufficient staffing • Untrained/inexperienced personnel • Incorrect deployment of personnel
Infrastructure	• Inadequate power, technology, utilities • Improper sanitation and waste management • Insufficient traffic and parking management
Operations	• Occupational health and safety • Installation, operation, close-down logistics • Equipment, décor, special effects
Organ...