1. Creating a Risk Thinking Organisation Jobs and Enterprise, Regeneration and Resources and Culture and Well Being Select Committee 1 st June 2011

2. Introduction Purpose of this presentation is to provide an overview of: Risk management and why it is important How we are improving risk management practice in South Tyneside Select Committee contribution to effective risk management Why? Better risk management will lead to better decision-making and better outcomes

3. ‘In modern democratic societies, public institutions exist at a fundamental level, to address risks that confront society’. Public Sector Risk Management, Fone and Young 2000

4. HEALTH ECONOMIC Council ENVIRONMENTAL SOCIAL Community REPUTATIONAL FINANCIAL LEGAL

5. Economic Regeneration Children, Adults and Families Shaped to Deliver Innovation, Efficiency, Delivery Ambition and Prosperity Shaping Our Future

6. Risk and Internal Control Risk Management Corporate Resilience Strategic Planning Insurance Performance Management Audit PlanningFinancial Control Business Practices/Internal Control Disclosure & Transparency

7. Risk and Decision-Making Processes Council & Constitution Performance/Service Planning Financial Planning Procurement & Commissioning Project Management Partnerships Audit, Monitoring & Compliance Better Risk Management Better Decision Making Better Performance Better Outcomes

8. Identify Risks & Understand Origins Quantify Risk Impact & Mitigation Cost/Benefit Agree Acceptable Risk Levels Identify Risk-related Actions Required Agree Strategic Goals Identify Actions Required & Likely Effects Monitor Implementation of Actions Monitor External/Internal Changes Update Goals & Assumptions RISK MANAGEMENT PROCESS STRATEGIC PLANNING PROCESS A model of intelligent risk management

9. Strategic Risk Commonly defined along the lines of ‘an event which may occur in the future and which if it happens might significantly impact on the ability of an organisation to achieve its objectives’. This focuses attention on the ‘things that might go wrong’ but it is equally important to include the exploitation of opportunities that might significantly enhance the achievement of objectives.

10. Why do we need to manage strategic risks? The effective management of strategic risk is critical to the success, and even survival, of an organisation. In simple terms managing strategic risks should lead to four key outcomes:  A better performing organisation with better outcomes for stakeholders;  Achievement of the ‘right’ objectives with fewer ‘slip-ups’;  Building greater stakeholder ‘value’, and  Hitting performance targets more easily.

11. Strategic Risk Areas of Relevance to this Committee Increasing the number of jobs in the Borough Regenerating the Borough Developing cultural solutions Delivering the Medium Term Financial Plan Ensuring effective governance and internal control Delivering planned or critical ICT improvements and maintaining information security Implementing planned structural and organisation changes Responding to increasing demand for services

12. Select Committee Contribution to Risk Management In performing their scrutiny role Select Committees are ideally placed to examine how key strategic risks are being managed and to provide direction where appropriate. By focussing attention on key risk issues Select Committees will help improve decision making, improve performance and deliver better outcomes.