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Local governments of all sizes and locations can benefit from taking a moment to consider the effectiveness of their risk management program. We've got 10 practical tips to think about to refresh the process for the new year.

1.      Establish common language

There are multiple interpretations of risk words such as 'major', 'high' and 'low'. It's crucial to establish common templates and language to define, capture and measure risks so that all matters associated with risk can be communicated effectively and understood consistently. 

2.      Defined framework

Managing uncertainty is part of life. To do it in a coordinated manner as part of a team or organisation requires a defined and endorsed framework. A good framework provides the mandate, context, foundation and parameters for all risk management activities within the organisation. 

3.      Integrate

Risk management shouldn't be viewed as a silo or only one person's responsibility. Align risk management activities to existing planning and budgeting processes and timelines. Make risk a part of everything you do. 

4.      Keep it simple

Starting with and reflecting on the question “What do we want to achieve with our risk management program?" ensures the most effective and simplest methodologies can be applied. There is no need to over-complicate risk management just for the sake of it. 

5.      Use the information

Risk information is valuable to inform strategies and decision making. Many risk registers are left to gather dust once completed. The risk register is only the beginning of the journey and it's how this information is then interpreted and used that delivers value. 

6.      What's reasonable

You don't need to eliminate every risk, but you do need assurance that you are doing what would be considered reasonable by the average person to mitigate risks. A simple reasonableness test for risks and their existing controls is a valuable component of the risk acceptance decision. 

7.      Walk the talk

Asking someone else to do a risk assessment does not absolve any ownership or responsibility associated with the risks. Senior management should be fully engaged with the risk management program and participate in risk assessments. This demonstrates commitment and ensures senior management are in a good position to interpret, understand and use the risk information wisely. 

8.      Use your networks

You are not alone on your risk management journey. Use your internal and external networks, such as LGIS and the Risk Management Advisory Group, to discover what works. Share lessons learnt, explore foreseeable risks and determine reasonable control measures and available treatment options. No need to re-create the wheel. 

9.      Accept or treat

You don't need to treat every risk. A risk owner should be asking “Can we now accept the risk based on its level of risk, existing controls, and the reward received?" If the answer is 'Yes,' then no further treatment is required and the risk forms part of an ongoing monitor and review process. If 'No,' consider further treatment options. 

10.  Focus on the positive

Risk management gets criticised for focusing on the negative and what can go wrong. It's worth remembering that these activities are done to better understand the exposures and hurdles to enable success and the realisation of opportunities.

For more information and support in developing your risk management program contact your Regional Risk Consultant or the LGIS Risk Team.