Engaging with risk
Citizens rightly expect governments to be prudent in their use of public funds – and they expect high standards of accountability from public officials. Citizens also expect a better performing public sector that delivers better outcomes at lower cost. In a complex environment this involves improvements in productivity, innovation, experimentation and the risk that something may not work out as planned.
The public sector’s challenge is to promote a high standard of risk management that fosters, rather than stifles, innovation. This can be especially challenging when operating to high standards of accountability and transparency in a politically charged environment.
An overarching Commonwealth risk framework, including supporting legislation, could help achieve greater consistency in risk practices across the Commonwealth. Among other things, it could set the context for how entities determine risk tolerances and manage their material business risks.
Employees need both the right skills and the right attitudes to handle risk effectively. They also need to be empowered to take prudent, common-sense risks to achieve better outcomes.
Does the current financial framework assist or hinder risk taking and innovation?