Ted Dahms
Plum Concepts & Solutions
OVERVIEW
„
Risk & Control
„
Risk, Control & Governance
„
Management principles & governance
frameworks
„
Implementation
Conceptual Evolution
„ 1998
– governance & risk reviews
„ Governance
„ What
„ How
& risk – relationship?
is Governance?
does one evaluate?
Risk & Control
Concepts with different origins
Internal control – accounting
profession
Risk management – engineering
profession – later insurance industry
Now inseparable
RISK
Risk is now defined as the chance of
something happening that will have
an impact upon objectives.
AS/NZ4360
CONTROL
Those elements of an organisation
including resources, processes, systems,
culture, structure and tasks that taken
together support people in the
achievement of an organisation’s
objectives.
Accountants
Canadian Institute of Chartered
SOFT CONTROLS
„
Soft controls = new concept in control
„
Bureaucratic control – command/control
„
Soft controls –
Leadership
Capability
Team work
Accountability
Values
Flexibility
Communication
Anticipation
RISK STEPS
„
Identification – you can’t manage what
you don’t know
„
Analysis – likelihood and consequence
„
Assessment – Level of risk
„
Treatment – Plans to Manage risks
„
Monitor and Review – Risks are dynamic
GOVERNANCE
Definition:
Governed
Organisation
Objectives
Controlled
The control environment provides reasonable
assurance that objectives will be achieved
within an acceptable degree of residual risk.
GOVERNANCE & RISK
Paradox –
„
Governance definitions rigid concept
„
Unexpected threats
„
Opportunities
Governance
Risk Management
Glue
Resilience
Management Principles
Corporate Governance
Management
Tools
Logical Interrelated set of principles
Management Principles
„
Setting corporate goals and objectives
„
Developing an organisational structure
„
Clarity of roles and responsibilities
„
Matching authority – delegations
„
Code of Conduct
Management Principles
„ Monitoring
& Reviewing
„
Conformance
„
Performance
„ Reporting
„ Information
systems
Frameworks
„ No
one framework that suits all
„ Varies
even within the one legislative
environment
„
Mandatory structures
„ Discretionary
structures
Private Sector Framework
SHAREHOLDERS
Delegated
Authority
ACCOUNTABILITY
Directors
on Board
Delegated
Authority
ACCOUNTABILITY
CEO
Departmental Framework
MINISTER & PARLIAMENT
Delegated
Authority
ACCOUNTABILITY
ACCOUNTABLE OFFICER
Delegated
Authority
ACCOUNTABILITY
DEPARTMENTAL OFFICERS
Implementation
„
Don’t have to abandon all you are
currently doing!
„
Evolutionary not revolutionary
„
Cultural shift – transformational change
„
Compliance to a performance focus
„
Committed and competent managers
Key
Competencies
Systems
Thinking
Governance
Learning
Organisation
Trust &
Relationships
Systems Thinking
„
Complexity broken down for
understanding
„
Predisposes silos
„
Autonomy never absolute – holistic view
„
Not closed systems - Co-evolving
Learning Institution
„
Adaptive and generative learning
„
Shared vision - open communication
„
Climate of commitment & trust
„
Alignment of ideas ´ Team learning
„
Risk taking encouraged
Trust & Relationships
„ Grounded
in ethical concepts
„ Interdependent
„ Essential
„ Without
agents need trust
for team learning
–
„
innovation and synergy do not flourish
„
retain command/control structures
„
Focus on conformance not performance
Competencies
„
Competencies matched to goals
„
Sound HR practices
„
Maintain alignment
„
Strategic HR planning – a must
Summary
„
Objectives = purpose & focus
„
Risk = Control = Governance
„
Risk = resilience
„
Strategies = Objectives + Risk
„
Risk is pervasive
„
Risk Management practitioners – key role
Questions?
Ted Dahms
edahms@bigpond.net.au