Hire managers who understand risk

by Charles Simba for Business Daily Africa, February 17th, 2011.

Many public sector organisations will continue to be faced with an increasing demand for better and cost-conscious service delivery, value for money and the need to manage their reputation. Recent public interest in good governance following publishing of the new Constitution are changing the business and operating environment.

Expectations are high and the public is demanding that institutions be responsive to questions regarding their reputation and the reputations of managers. So institutions must guard against reputational risk by doing (and being seen to do) the right thing. Legal and regulatory compliance is a statutory obligation and a generally accepted corporate governance requirement. There are many institutions that only consider compliance when there is a breach of regulations, such as fines paid for financial misconduct or when reported on in the audit report of the Auditor-General.

However, effective risk management recommends proactive consideration in decision making and how risk is integrated into operations. In fact, risk management should be an integral part of an institution’s operational and financial performance. (continue reading… )

 

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