Risk refers to the uncertainty that surrounds future events and outcomes. When we hear the term “risk” we usually think of a threat or something with a negative impact which should be mitigated or avoided as far as possible. Whilst this is often the case, not all unexpected events will have negative consequences, and risks which could result in positive outcomes also need to be managed to ensure that the potential opportunities they present are fully realised.
Risk management is the process by which the Council identifies, assesses and manages risks to increase the possibility of success and reduce the probability of failure. It is essential that the Council actively monitors and manages its risks in this way to ensure it can achieve its corporate priorities, deliver services as planned and fulfil its statutory obligations. A Risk Management Policy has therefore been adopted to formalise this process.
The policy sets out:
- the risk management strategy;
- a three-tier risk framework covering strategic, operational and project-based risk;
- roles and responsibilities – the responsibility for risk management rests with all Members and Officers of the Council;
- the methodology for identifying, evaluating, monitoring and managing risk;
- our risk appetite – i.e. how much risk the Council is prepared to accept for different activities. NB – The Council cannot be risk-averse if it is to achieve its corporate objectives, but the policy sets out clear limits on how much risk can be tolerated.
In summary, risk management is an important Council process and is an integral component of good management. A high-performing Council needs to be fully committed to an effective risk management culture and recognise it as helping it to achieve its key aims and objectives.
For further information and to view the document, please continue to the Risk Management Policy and Framework.