Greater risk awareness and its integration with performance by the Public Administrations makes it possible to obtain greater levels of performance and Public Value, i.e. improvement in the wellbeing of the reference community.
The growing interest in risk management in Public Administrations comes as a consequence of risky events, due to internal and external causes experienced by them: flooding due to climate change, unemployment, the failure of public-private partnership projects, the theft of data as a result of poor Information Technology system security and, more recently, health risks to do with the COVID-19 pandemic. Public Administrations must therefore manage the following risk categories: Compliance risks; Administrative risks; Economic-financial risks; Safety risks; IT risks; Transparency risks; Privacy risks; Reputational risks; Strategic risks; Operational risks; Quality risks; Environmental risks; Macroeconomic risks; Health risks.
Risk management has therefore become a central aspect that every administration must oversee by implementing integrated risk management systems. Integrated risk management is a framework through which to appreciate, as well as the benefits of a unitary management of all risks, the association that exists between risk management, the corporate governance, internal controls and organisational performance. This is only possible in organisational contexts based on the processes; it is therefore necessary to proceed with mapping the organisational processes so that the entire activity carried out by the administration is gradually examined in order to identify areas which, because of the nature and the characteristics of the activity itself, are potentially open to risks.
A risk management system integrated with the performance management system will in fact make it possible to:
- on the one hand link the risks to objectives, identifying those events that if they occur can positively or negatively impact the objective. This allows possible response actions to be identified aimed at eliminating or mitigating their impact, thereby allowing the objective to be achieved.
- while on the other hand reducing the uncertainty and the consequences due to chance events, so that the uncertain costs arising from damages caused by exposure to the risks, become foreseeable and definable costs.
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