Integrated risk management : a mechanism to minimise risks for local government : a critical perspective

[摘要] The absence of an integrated risk management programme in local government in SouthAfrica creates the danger that these risks are not identified, which could be catastrophic,and opportunities to minimise losses are not utilised. A further problem is that commonrisk-management terminology is lacking and management are dependent on diverselegislation as a guide to developing and implementing risk management.In order to achieve the strategic and operational objectives of local government in aneffective and efficient manner, a pro-active identification and evaluation of potential risksshould be established to minimise their impact. Officials on every level need to beinformed about processes and techniques for managing risks and recalibrating activitiesto enable management to operate more effectively in risk-filled environments.Problems were identified that prevent management from providing reasonable assuranceto stakeholders that the most significant risks are being addressed. These problems are asfollows: the lack of applying risk management in an integrated manner; the enforcementof integrated risk management due to the lack of relevant legislation; a lack of training inrisk management, ethics and risk response plans; a lack of practical techniques to assistofficials in taking remedial action to prevent recurrence of risks; the absence of a risksensitiveorganisational culture; and a lack of commitment and leadership frompoliticians and management.Relevant legislation on integrated risk management should assist in embedding a culturewhere everyone in local government is obliged to adhere thereto and to conduct their dayto-day activities accordingly. A mission and vision statement needs to be developed andimplemented with the consent of all stakeholders. Integrated risk-management processes,which are generally lacking or incomplete in local government, should be aligned withgeneric public management functions.An integrated risk-management programme can be enhanced by establishing a riskorganisational structure within local government. The establishment of a risk management department and risk committee is essential to the enhancement of corporategovernance and the management of risks that might have a negative impact on localgovernment.Internal and external controls should be evaluated regularly to facilitate the riskmanagementprogramme. An Integrated Risk Monitoring Technique is proposed as atechnique to assist stakeholders in identifying root causes of risks and the managementthereof. A model of integrated risk management was designed to assist academics andpractitioners to get a holistic perspective on integrated risk management and to assist inthe management of risks.

[发布机构] Stellenbosch University