Risk Management In Society, Organisations, Industries And Workplace

A COMPONENT OF GOOD MANAGEMENT AND GOOD GOVERNANCE.

We are exposed to risk every day in our professional and personal lives. This whole of life approach to risk is constant and most of life's gains, in business and personally, result from exposure to risk, hazards and injury. The impact of no activity can also result in considerable exposure to risks in our gradually developing society. It can be said that risk is rooted in physical, social, economic and environmental vulnerabilities. As new ventures are created, organisations often put considerable resources at risk and in some cases do this without any assessment of the risk exposures to the individuals or the organisation. There is a need to assess and manage risk in our society on a continual basis.

In society we cross the road, play sport, operate electrical appliances, attend social functions, undertake various levels of manual work for professional or personal gain or can be exposed to terrorism as a targeted player or an innocent bystander. In all aspects of life we are exposed to risk and, consciously or unconsciously, undertake risk management strategies. In some cases these are extremely minimal, for example, swimming in dangerous waters. To protect our organisational and personal assets, a significant number of us attempt to transfer risk with insurance policies.

While various developmental programs/projects are currently taking place in Ghana, albeit slowly, we notice that many risks are acceptable due to the nation's inability to find resources to address the identified or perceived risks. For example, the levels of acceptable risk in Australia and Ghana are considerably different. The reason being that one nation (Australia) has an industrialised workforce and a society with workable levels of wealth. Such factors impact on the extent of risk management within the society. Developed nations (and so should it be for developing countries) have legal systems that enforce laws and governments that establish guidelines and sometimes criteria in areas such as occupational health and safety, financial management, environment and corporate governance. The recent inclusion of corporate governance was prompted by a number of corporate collapses and their impact on a society's positive economic perspectives. With the recent introduction and promulgation of the various Acts on procurement, financial management, audits etc, it can be said that Ghana is heading towards the right direction in this regard. It will be the implementation phase - with its controlling, monitoring, evaluation, performance measures for the desired outcomes that will indicate the efficacy of the tools.

However, no matter how developed our society will be in the future, we should be mindful of the fact that we currently are and will be innately contributors to the extent of risk awareness. Consequently, the extent of risk management depends largely on the quantity and quality of the available information and the differences in people's perceptions of risk. This perception and available resources are key factors in determining how a society addresses risk management and business continuity.

In all aspects of our working environment we are exposed to risk and various levels of risk management by individuals or the organisation. Corporate governance, workplace agreements and legislation establish a number of safety net provisions for the workplace related to risk management for employees and the organisation. The organisation balances these with the allocation of resources to projects or ventures and the requirements to maximise profit and add to shareholder or owner value. On occasions, there can be a number of consistent or inconsistent forces within an organisation that can generate risk. Alternatively, risk events can be generated within the organisation by external natural events, such as earthquake, cyclone or fire. The generation of a risk event or a crisis can come from numerous sources and the impact can depend upon, the level of vulnerability, the level of preparedness, the mitigation practices and the capability of the response.

As most organisations operate with a hierarchical structure or a matrix structure, unless a predetermined reporting system is arranged, the management of risk can be lost within accountabilities. Just as financial reporting systems can be centralised or devolved in an organisation, so too can the management of risk. A manager, however, must address risks within his/her area of responsibility, as well as be accountable for all financial actions. The manner in which this materialises depends on the culture and operating practices of the organisation. Successful organisations have developed managers who operate in a partnership arrangement with staff, customers and suppliers or contractors. It is impossible for a manager to be an expert in all facets of his/her areas of responsibilities. Collective wisdom, therefore, is required and risk management particularly lends itself to participative decision making. For example, focus groups being held to identify and assess risks associated with particular projects or ventures.