By Robert Masters
A key element of the governance of any business or government 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 surprising is that risk management programs appear to have fallen off the agenda for government and companies. The number of issues emerging in the media shows something is sadly lacking in the risk management process.
Public stoushes between corporate leaders, disruptions 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 that should have been considered in a risk register.
The public deserves better than what it is seeing at the moment, not to mention the climate of fear, misinformation and misguided debate that is going on.
It is accepted business knowledge that well-designed risk management plans can decrease problems encountered on a project by as much as 90 per cent. This applies equally to the management of any company or 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 bad PR, potential issues and negative stakeholder reactions. Risk mitigation strategies are often at such a high level that they fail to provide sufficient guidance for an acceptable outcome consistent with the ‘appetite for risk’.
All corporate and government policies should go through a thorough stakeholder and operational risk assessment process before they are floated in the media to assess ‘community debate and reaction’.
Communities nor the proposers of policies or projects need a plethora of hysterical headlines creating fear, anger and angst. Six structured steps are all it takes to develop an effective risk register, but its effectiveness is in the detail of its planning, development and diligence.
ICG has extensive experience in creating and implementing comprehensive risk registers and risk mitigation action plans; contact us before you embark on your next big project.