The public services sector has faced significant challenges over the past several years—slow economic growth, rising unemployment and aging populations, to name but a few. These risk factors are driving the need for public service organization to step up their risk management efforts.
Based on the results of Accenture’s 2013 Global Risk Management Study, a survey of top executives in 47 public services organizations from the U.S., Europe, Latin America and Asia found that 36 percent cited regulatory risks and 32 percent citied reputation risks as the areas of risk they see rising over the next two years.
The majority of respondents said these and other risks were prompting them to incorporate risk management into other business functions. In addition, 64 percent said their organization has further work to do to manage compliance risks.
Just over half the organizations surveyed had annual revenues or budgets between $1 billion and $5 billion, and 45 percent had annual revenues or budgets over $5 billion, while 4 percent fell below $1 billion.
While these organizations currently trail other sectors in enterprise risk management (ERM) adoption, they overwhelmingly intend to adopt ERM in coming years, the report said.
“To develop talent in the risk function, organizations are increasingly deploying innovative staff rotation and training programs to create more risk management capacity and capability,” according to the study’s executive summary. “To develop a broader risk culture, organizations are also adjusting incentives, involving senior management, and deploying social media.”
Accenture enumerated several ways public services organizations can address the risk management:
1. Move beyond compliance, turning ERM into a tool that delivers business value: Public services respondents report facing an unprecedented set of risk challenges, from digitization of communication to budget cuts. Managing the associated risks demands a higher level of capabilities.
2. Treat risk as a people game, leveraging capability building programs to build risk talent: Making risk a greater organizational priority, connecting risk to the broader business, and leveraging focused technologies to bring more transparency and consistency to critical issues can help to move this forward—but organizations would still require the talent to execute this agenda.
3. Embed the risk function in the organization by developing an organizational risk culture: The risk function often has a leading role to play in developing an organizational risk culture—for instance, by adjusting incentives, involving senior management in risk, and rolling out training programs to maintain the right discipline and focus.
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