The Department of Finance has released the first whole-of-Government policy for the management of risk for Commonwealth Government staff.
The Commonwealth Risk Management Policy requires Departments and Agencies to define the tolerance for risk, including for the Government and the community; ownership of risk within their respective organisations; and how entities engage with risks for which they cannot take full responsibility.
"A professional approach to risk requires a shift to efficient and informed risk management" and "engaging with risk is a necessary part of improving performance," according to the policy.
"Government officials that are better able to engage with risk are less likely to develop regulatory frameworks that are unnecessarily prescriptive and out of step with commercial practice."
The Commonwealth's general risk insurer, Comcover, will continue to work closely with Commonwealth Departments and Agencies to improve their risk management performance and capability.
Minister for Finance, Senator Mathias Cormann said the policy supported the Public Governance, Performance and Accountability Act 2013, which established a framework that required Departments and Agencies to establish and maintain systems and internal controls for the oversight and management of risk.
"A more productive, innovative and efficient public sector requires a focused approach to managing risk in order to achieve the Commonwealth's strategic objectives and to limit unnecessary red tape," Senator Cormann said.
"Effective risk management, based on sound judgment and the best information available, enhances the Commonwealth's capacity to identify, manage and derive maximum benefits from new challenges and opportunities."
He said the nine elements of the policy sought to strengthen the risk management practices of Departments and Agencies "by encouraging officials to engage with risk in a positive and transparent way".
"This new approach to managing risk is crucial to facilitate innovation, and in turn, improved policy development and service delivery," he said.
"These nine elements will assist accountable authorities to build on their existing risk management framework, develop more detailed arrangements for risk oversight, and embed them into day to day business practices."
The policy can be viewed at this PS News link.
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