Integrated risk management : a mechanism to minimise risks for local government : a critical perspective
Date
2006-12
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : University of Stellenbosch
Abstract
The absence of an integrated risk management programme in local government in South
Africa 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 common
risk-management terminology is lacking and management are dependent on diverse
legislation as a guide to developing and implementing risk management.
In order to achieve the strategic and operational objectives of local government in an
effective and efficient manner, a pro-active identification and evaluation of potential risks
should be established to minimise their impact. Officials on every level need to be
informed about processes and techniques for managing risks and recalibrating activities
to enable management to operate more effectively in risk-filled environments.
Problems were identified that prevent management from providing reasonable assurance
to stakeholders that the most significant risks are being addressed. These problems are as
follows: the lack of applying risk management in an integrated manner; the enforcement
of integrated risk management due to the lack of relevant legislation; a lack of training in
risk management, ethics and risk response plans; a lack of practical techniques to assist
officials in taking remedial action to prevent recurrence of risks; the absence of a risksensitive
organisational culture; and a lack of commitment and leadership from
politicians and management.
Relevant legislation on integrated risk management should assist in embedding a culture
where 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 and
implemented with the consent of all stakeholders. Integrated risk-management processes,
which are generally lacking or incomplete in local government, should be aligned with
generic public management functions.
An integrated risk-management programme can be enhanced by establishing a risk
organisational structure within local government. The establishment of a risk management department and risk committee is essential to the enhancement of corporate
governance and the management of risks that might have a negative impact on local
government.
Internal and external controls should be evaluated regularly to facilitate the riskmanagement
programme. An Integrated Risk Monitoring Technique is proposed as a
technique to assist stakeholders in identifying root causes of risks and the management
thereof. A model of integrated risk management was designed to assist academics and
practitioners to get a holistic perspective on integrated risk management and to assist in
the management of risks.
Description
Thesis (PhD (School of Public Management and Planning
))—University of Stellenbosch, 2006.
Keywords
Theses -- Public management and planning, Dissertations -- Public management and planning, Local government -- South Africa, Risk management -- South Africa