Transcript MCC Enterprise Risk Management System

Enterprise Risk
with Local
Government
Enterprise Risk
• a process, effected by an entity's board of
directors, management and other personnel,
applied in strategy setting and across the
enterprise, designed to identify potential
events that may affect the entity, and manage
risks to be within its risk appetite, to provide
reasonable assurance regarding the
achievement of entity objectives." Business
Dictionary.com
Manningham – 15 Enterprise Risks
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Financial;
Asset Management;
Contract Management;
Legislative Compliance;
Public Health;
Climate adaptability and Emergency Management;
Information Technology Reliance;
OH&S
Manningham – 15 Enterprise Risks
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Fraud;
Planning (Strategic and Statutory);
Infrastructure Investment Provision;
Provision of Services;
Adverse Impact of Changes in Government Policy;
WorkForce Management;
Governance.
Manningham – 15 Enterprise Risks
Feedback
• Some 30 Councils provided information
Risk Categories
25
20
15
10
5
0
Note: Quite a few Councils use more than one category – Nearly all use
Operational – so not included.
Variation
• There was a lot of variation in definitions and
structure across Councils.
• Not necessarily a bad thing?
Strategic Risk
• A possible source of loss that might arise from
the pursuit of an unsuccessful business plan.
For example, strategic risk might arise from
making poor business decisions, from the
substandard execution of decisions, from
inadequate resource allocation, or from a
failure to respond well to changes in the
business environment. Business Dictionary.com
Operational Risk
• Probability of loss occurring from the internal
inadequacies (could also be a failure to
identify a risk - RC) of a firm or a breakdown
in its controls, operations, or procedures. Business
Dictionary.com
Project Risk
• The exposure to a company that arises from
taking on a particular task. A project risk can
be internal to the business, it can involve
external events or it can stem from any other
circumstances that can hamper the project's
overall success and result in loss or
embarrassment to the firm undertaking it.
Business Dictionary.com
Financial
• The probability of loss inherent in financing
methods which may impair the ability to
ensure financial sustainability or provide
adequate return. Business Dictionary.com
Council List
Can provide list – for distribution – issue to remove Council name or not
My Thoughts
• I wanted to look at categories that reflected
the structure of the Municipality and that I
thought that employees could understand.
MCC Enterprise Risk Management System
Impacts,
Influences,
other risks
Council
(Corporate Risks)
Existing Service
and Projects
(Operational Risks)
Strategic Risks
Council Plan
Councillors
Objectives
New Services and Projects
Municipality
(Community Risks)
Impacts, influences
and other risks
Society
MCC Impacts and
Influences
Corporate
• Is the type and probability of a loss of
significant enough proportion to impact and
impede the Council’s management structure,
operations, legislative obligations, affect
Council’s reputation and /or capacity to
provide services to the municipality. The
consequences of this type of event will
generally impact a number of Service Units.
Strategic
• A potential source of loss that might arise
from the pursuit of the Council and/or other
Plans. The loss could arise as a result of the
development of the plan, unknown factors in
making decisions, from the execution of
decisions, from resource allocation, or from a
failure to respond well to changes in the
business environment.
Operational
• Probability of loss occurring from internal
influences resulting in, failure to meet service
standards, injuries to employees or other
person/s and/or damage to Council assets,
through failure to identify a risk, lack of
controls, operations, or procedures over an
identified risk within established Council
operations and service delivery.
Community
• As it relates to Council objectives, is the
potential for a sudden or gradual loss
impacting the municipality leading to a
reduction in amenity, standard of living,
community safety or community health and
well being and/or environmental degradation.
Rationale
Corporate Risk
Operation Risk
Executive Management Team
Monitors, supervises, allocates resources
Service Unit
- Controls, monitors & reports
- Activities & resources directed
at risk
Driver / Potential for additional Risks
Assets & Services
provided - Justification
Councillors
Strategic Risks
Council Plan
Objectives
Driver / Potential
for additional Risks
Community Risks
or expectations.
New Services and Projects
MCC Enterprise Risk Management System
Does the Risk have the capacity to significantly impact /
impede Council’s management structure, operations,
reputation or service delivery by Council?
Corporate Risk
Yes
(2nd Corp)
Significant Consequences
No
Does it relate to an existing service/project?
Operational Risk
Yes
No
No-longer new & retained
Does it relate to a emerging risk, new service,
project or strategic objective?
Strategic Risks
Yes
No
Yes
Community Risk
Service?
Is there an existing service targeted at risk?
Yes
No
No
Is a decision on a new service targeting the risk required?
No
Community Risk outside Scope of Council objectives.
Yes