Strategic risk management and councils

Many Australian local councils could have foreseen the strategic risk involved in exporting recycling waste to China, the founder of Paladin Risk Management says.

Rod Farrar, whose company is a sponsor of the 2019 National General Assembly, says there are differences between strategic and operational risks.

Strategic risks are those external to council, that if they were to eventuate, may require a change in strategic direction. Essentially, these risks are threats identified in a council SWOT Analysis.

Whereas an operational risk is one that is external or internal to a council that influences its current strategy.

Mr Farrar has advised councils on a range of strategic risks including: rreduction in external government funding, externally imposed organisational changes including amalgamation, and rate capping imposed or extended by government.

“These same strategic risks will apply to the majority, if not all councils,” Mr Farrar says.

“The management of strategic risk is problematic in that in all but the rarest of cases it is not possible to reduce the likelihood of the risk other than perhaps through lobbying.

“To that end, the management of strategic risk is more focussed on “what happens if” and developing strategies to be prepared if the risk eventuates.”

Come and visit Paladin Risk Management Services’ booth at NGA to find out more.