The biggest risk for the local government is health and safety, infrastructure and financial sustainability. According to a new analysis by Aon, it shows that many of the Australian councils are failing to adequately prepare for this risk.
The report suggested that more than 50 percent of councils are not paying heed to the overarching risks including human and environmental issues.
According to the global professional services firm’s 2018 Local Government Risk Report, a fifth of councils have no process at all for risk profiling, with most relying on their appointed insurance broker.
The report stated that forward-thinking councils are using data backed risk profiling and gap analysis techniques that help them enhance employee engagement and protect the wellbeing of the employees.
“They measure and manage their risk appetite and test the market for the most effective coverage. Avoiding overbuying frees financial resources to employ into council programs and projects for the benefit of the community,” the report said.
Key risks revealed
The report revealed that infrastructure in local government is the greatest issue followed by Financial sustainability. Growth in the economy prompts infrastructure risks. The analysis found the following risks that were prevalent:
How do you as an organisation minimize the risk?
Positive risk culture is where risk appetites and tolerances are clearly defined and communicated, in an environment where staff have the capacity to deliver risk management that is consistent with those appetites and tolerances. Entities with positive risk culture effectively identify, assess, monitor and manage risk across all levels, identify risks before they are realised, and focus on the lessons to be learnt when risk management doesn’t achieve the desired results.
Learn how to encourage organisational engagement to foster innovation & positive risk culture at the Strategic Risk Management in Government, 14th & 15th November 2018, Sydney.