Management of Risk
Introduction
To help better identify and manage its organisational risks, the Ministry is adopting a risk approach linking risks common to the whole organisation with those specific to individual business groups. The MAF risk approach will improve the way it identifies key areas of risk, lead to a clearer understanding of which risks matter the most, and help MAF identify and prioritise actions to address those risks.
The objectives of the MAF risk approach are to:
- Provide a simple and relevant management tool supporting strategic planning.
- Provide a profile of risks across MAF.
- Embed a “risk aware” culture throughout MAF.
- Ensure high level risk management processes, practices and standards are in line with accepted good practice.
- Guide effective policy formulation, priority setting and resource allocation.
Types of Organisational Risk
The MAF risk approach recognises four key categories of risk:
1. Capability Risks
These risks relate to MAF’s key resources, systems and process, knowledge, relationships and leadership enabling business delivery. These risks indicate what resources and controls are needed for MAF to deliver its contracted outputs and outcomes. Figure 6 describes in detail MAF’s capability risks. The MAF risk approach assesses how effective each business is at managing these risks and where the Ministry’s greatest exposure lies.
2. Contribution Risks
These risks relate to MAF’s ability to deliver its outcomes. The intermediate outcomes represent MAF’s specific contribution to its four outcomes. The organisation may fail to successfully contribute in the ways described by these intermediate outcomes which presents a key organisational risk. MAF business groups play specific roles in mitigating this set of risks and the MAF risk approach provides information on how effectively these risks are being managed.
3. Business Group Risks
These are the risks identified by individual business groups as most likely to affect their contribution to MAF’s outcomes, their own strategic plans and delivery of outputs. Often these may be part of capability and contribution risks but take into account the particular business group perspective.
4. Strategic Priority Risks
There are many challenges associated with MAF’s strategic priorities as work associated with them is often undertaken on a project basis and the project risks need to be managed. Risks associated with strategic priorities will be refined as the supporting work programmes are further developed.
Reporting Risk
Organisational risk profiles are developed for all business groups. Risks are continuously monitored and reported against as part of the normal business reporting process, then reviewed on an annual basis. Business group risk profiles are collated and analysed to present a whole-of-MAF risk profile. This profile is used by managers to inform or validate planning activities and direct assurance resources within MAF.
Figure 6: Top Capability Risks
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Category of Risk |
Statement of Risk |
Risk Mitigation |
Leadership – what ifMAF leadership and organisational structure is not responsive enough to deliver the expected stakeholder outcomes. |
The policies MAF promotes or implements may not be sustainable into the future, untimely or produce unwanted outcomes. |
Implement a strong outcome-based planning process which clearly and explicitly describes the links between those outcomes and the outputs MAF produces at any given time. Monitor and evaluate the impact of MAF’s outputs. |
People / Culture – what ifMAF culture does not provide the right environment to support and encourage its people to deliver expected outcomes. |
MAF may not have the right skills base or environment to deliver its services as required. |
Implement a comprehensive people strategy which addresses the range of factors supporting committed and capable people to contribute their skills, knowledge and experience to the achievement of MAF’s outcomes. |
Information – what ifMAF cannot demonstrate it is |
MAF management and use of institutional knowledge may impede delivery of its services. |
Maintain and monitor MAF’s understanding of the sector, food safety, biosecurity, their inter-connections and the context in which they do and will operate. |
Systems and Processes – what ifMAF does not provide its people with the appropriate tools including the technology needed to do their jobs effectively and efficiently. |
Higher demands for MAF services may create extra pressure and lead to a breakdown of its systems and processes. |
As part of MAF’s planning processes implement resource allocation, prioritisation and monitoring measures. |
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MAF may fail to keep pace with technical developments, invest poorly in inappropriate or mismatched technology. |
Develop and maintain the capability to understand and review MAF’s business processes so it can both change its processes as required and support them with appropriate technologies. |
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MAF may lack accountability for its individual and collective performance. |
Be explicit about what MAF and individual staff are accountable for and how performance will be measured. Monitor performance and respond appropriately to both good and poor performance. |
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MAF may not be organised enough to adequately respond to the diverse range of biosecurity, food safety, civil emergencies or natural disasters. |
Identify and confirm MAF’s role, develop response plans and put those plans into action. |
Contact for Enquiries
Strategy and Performance Group
Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: +64 4 894 0100
Fax: +64 4 894 0738
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