RSK4801 EXAM PACK 2023 QUESTIONS AND ANSWERS.
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RSK4801
Date: 25 May 2022
INSTRUCTIONS
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YOUR EXAM QR CODE & EXAM
ACCESS CODE
Exam Access Code: 417d867d
SCENARIO [100]
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You have been appointed as the part-time operational risk manager of a local dirt
track car racing club, situated close to the small town, of Malelane, in Mpumalanga.
The racecourse is a gravel track and could be very slippery during the rainy season.
As such, the weather could play a major role during races.
On your arrival, the chairperson of the club arranged a meeting with you and gave
you the background to the appointment of an operational risk manager. He
mentioned that the club has 50 active members who are keen to participate in events
throughout the year (mostly on Saturdays). However, the number of saloon-type cars
that can safely race in a single race is five, due to the width and capacity of the track.
On average 30 members want to race on a Saturday. One race takes about two
hours to complete, including preparation of the cars, drivers, and other preparations.
After each race, it is necessary to clean the track, which could take another hour,
although this action is sometimes neglected because of the time constraints to
coordinate at least six events to provide all the drivers an opportunity to race. This
Instructions:
Consider the scenario and answer ALL the related questions in the space
provided.
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situation often leads to unhappiness because it is not always possible to fit in six
races per day due to the time restrictions. A typical programme for a Saturday is as
follows:
06h00 – 07h00: Prepare the racetrack and coordinate entries to race in various
categories (based on engine capacity)
07h00 – 09h00 Race 1
09h00 – 11h00: Race 2
11h00 – 13h00: Race 3
13h00 – 15h00 Race 4
15h00 – 17h00 Race 5
17h00 – 19h00 Race 6
19h00 – 20h00 Closing
In the winter, the last race from 17h00 to 19h00 might be problematic due to the
early sunset which could cause poor visibility for the drivers. There are no floodlights
at the track. Owing to the speed of the cars, poor visibility might cause fatal crashes.
From the club’s perspective, it is crucial to provide all its members with an
opportunity to participate in a race, otherwise, it could lead to a loss of members and
the closure of the club. The community and the local municipality furthermore placed
an embargo on the club to host any racing event on Sundays.
Members are responsible for their cars, and there are specific safety rules that must
be adhered to. However, the time restrictions result in the marshals failing to check
on these safety measures, which could have disastrous consequences. On average,
there are about four minor crashes per racing day. Most crashes do not have any
injuries, although in the past five years there were two crashes with serious injuries
to the drivers. One of these crashes also involved spectators who were too close to
the track since there are no safety railings. Spectators are warned not to sit too close
to the track. However, due to a shortage of control staff, these warnings are ignored.
The club management comprises the following members, who are also seen as
members of the board:
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• Chairperson
• Deputy chairperson – mainly responsible for the security and safety control
measures
• Member – responsible for the financial management
• Member – responsible for the maintenance of the track
• Member – responsible for arranging the events (track marshal)
• Member – responsible for catering and medical support
All the above members are not fully qualified for their portfolios, which causes that
some important functions are neglected. The chairperson mentioned, for example,
that he and the Club Management Committee are specifically concerned about the
safety control measures during the races, because the responsible member is not
coping with the implementation of the safety rules. These measures are one of the
crucial components of a racetrack that will ensure safe races. The Board is not
prepared to tolerate any safety incidents and wants to follow a zero-tolerance
approach when it comes to the safety of the drivers and spectators. The safety
problem could also lead to a loss of participants and negatively influence the
reputation of the business. Although the reputational risk is difficult to measure, it
could lead to a decline in race participants and spectators. According to the
chairperson, it is crucial that reputational risk be dealt with, although it is not
traditionally part of operational risk management, reputational damage is almost
always a consequence of an operational risk event. Specific reputational problems
which could negatively affect the racing club should be determined and controlled.
This would also assist in achieving the club’s long-term objective of competing with
other national dirt track racing clubs and attracting international attention and
sponsors, which could ensure that the club remains a profitable and recognised
business.
In addition, the roles and responsibilities of the Club Management Committee
regarding risk management are unclear, causing general neglect in risk
management. It is essential to be knowledgeable about the activities of the Board
and other role players when it comes to risk management.
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Furthermore, the clubhouse does have a medical room, but it is not adequately
equipped with medical equipment. Usually, an ambulance is hired during racing days
but it does not always arrive on time, causing the racing to continue without any
medical support. This could also have a disastrous effect, should there be a crash
with serious injuries. It could also result in the club having to close down due to
inadequate medical support.
The chairperson also mentioned that when it rains, the chances of crashes are
higher than normal and it will be necessary to carefully plan around this safety risk.
However, it usually starts raining in the afternoons and the entrants for a specific day
do not want to cancel the race, because they usually cannot race the next weekend
due to pre-bookings for a month in advance. This could potentially be a dangerous
situation if the race continues in such weather conditions.
Currently, the club does not have any insurance for possible legal claims against it
by spectators who are at risk when sitting too close to the track. This risk should be
attended to as a priority. All racing drivers sign an indemnity form whereby they race
at their own risk. However, this control measure does not apply to spectators paying
an entrance fee to watch the races.
The chairperson also mentioned that an important source of income for the club is
leasing the clubhouse to external companies to host conferences and functions.
However, an issue that is hampering this benefit is frequent power failures. These
power failures result in the companies taking their business elsewhere and causing a
decline in income necessary for keeping the club profitable. He mentioned that the
following outages occurred during the past year: [Show Less]