Risk management failure - climate of fear

A key element of the governance of any government, organisation or business today is its risk register. It should be the right hand tool for Ministers, CEOs, Chairpersons, Boards, Cabinets and Advisory Committees.

It is integral to the due diligence process and provides an overview of the degree of exposure, or ‘appetite for risk’ leaders are prepared to take with a policy, project, product, service or any new initiative.

What is becoming surprising is that risk management appears to have fallen off the agendas of government and many companies at the moment.

The number of issues emerging in the media of late shows something is lacking in the risk management process.

The public stoush between corporate leaders at Bondi, the disruption of ABC’s Q&A program, the goings-on of ICAC involving politicians and corporate leaders with party donations, forgotten bottles of wine etc. are just some of the examples, along with the National Commission of Audit’s recommendations, proposed retirement ages and, worst still, past initiatives of the home insulation scheme and the national broadband network.

The public deserves better than what it is seeing at the moment and the climate of fear, misinformation and misguided debate that is also going on.

It is common knowledge that well-designed risk management plans can decrease problems encountered on a project by as much as 90 percent. This applies equally to the management of a company or a government.

Combined with very sound management methodologies, a robust and detailed risk management process can eliminate the headlines of today and diminish the issues arising unexpectedly or provide the basis for sound, reasoned debate – not hysteria.

Unfortunately, many risk frameworks only cover operational risks and few provide sufficient analysis in relation to potential issues, stakeholders, mitigation strategies and acceptable outcomes – the risk appetite. All too often the material is at such a high level that it fails to identify an emerging issue and provides no guidance to an acceptable outcome.

All government policies should go through a thorough political and operational risk assessment process before they are floated in the media to assess ‘community debate or reaction’ as to whether or not they are palatable, acceptable, possible or can be implemented effectively.

Communities don't need a plethora of headlines creating fear, anger and angst.

Six steps are all it takes to develop an effective risk register, but its effectiveness is in the detail of its planning and development and the diligence of leaders.

RMA has extensive knowledge and experience in developing and implementing comprehensive risk registers and detailed mitigation action plans; contact RMA for details.

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