Most of the risks in events are directly related to the event stakeholders. The stakeholder's tolerance to risk will define many aspects of the level of risk that can be accepted by the event that is the event's tolerance to risk. For example:
· Investors in the event will be interested in the financial risk - the exposure they have because of their investment. They expect to make a profit. The level of this profit will set the tolerance of the financial risk of the event. This tolerance is a major input into the risk management process for an event. The fact that it may be difficult to measure should not mean that it is ignored.
· Sponsors of a cultural event such as an exhibition may not want certain types art works exhibited as it may reflect badly on their image. If their requirements are ignored the event could be cancelled.
· For a sporting event, there may be dangers well known and accepted by the competitors. However, if the risk goes beyond a certain limit they will not take part in the event.
The stakeholders can be categorised a number of ways: Not all stakeholders are positive – i.e. the local residents may not want roads closed during a cycle race, so they must be assessed as primary/secondary, internal/external; and positive/negative.
· Primary stakeholders - those who are very focused on the success or otherwise of the event, for example the attendees or a sponsor. These stakeholders will require constant management, reporting or other communication
· Secondary Stakeholders - those who will only be interested in the event if it passes a threshold of importance i.e. the local police
· Internal Stakeholders - those that are involved in the event planning and implementation of the plan such as the event committee
· External Stakeholders - those who are not directly part of the event but still have a strong interest in it - such as the local residents, banks or sponsors
· Positive/Negative - the effect of the event on the stakeholder i.e. positive - such as the sponsors or negative - such as competitive events
Forgetting to pay attention to any one of these groups can threaten the success of the event.
These are not mutually exclusive categories and they may change over the life cycle of the event. An external primary stakeholder such as the road traffic authority can move from being positive towards the event to negative very quickly if proper monitoring is not used.
Next, find out how to treat the risks you have now identified