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Core
Policy and Procedures Manual
14.1
Objectives
- recognize risk
management as critical to the achievement of government's goals and
governance responsibilities
- integrate
Enterprise-wide Risk Management (ERM) into the corporate culture
- maintain a proactive
approach to the identification, analysis, evaluation and treatment of
potential risks, at optimal levels of assurance for stakeholders and
at minimum cost to the Province
- establish a risk
management process that is clearly defined and documented and fully
integrated with other strategic and operational processes
- continuously apply
risk management practices in decision-making, including proper accountability,
evaluation, performance monitoring and reporting, and improvement of
planning and practices
- identify, commit
and train adequate resources within each ministry to implement ERM practices
14.2
General
Risk is the chance
of something happening that will have an impact upon the achievement of
objectives. It includes risk as both opportunity and threat. Risk management
is the culture, processes and structures that are directed across a ministry
(or public sector entity) towards the effective management of potential
opportunities and adverse effects to the Province. The process involves
identifying and evaluating both the likelihood and impact of risks in
a cost-effective manner, and providing management and staff with the skills
to identify, assess, treat and monitor risks.
It is sound business
practice to manage risk effectively and to incorporate risk awareness
and treatment into the processes used to pursue ministry objectives. The
effective management of risk can only take place within a framework that
enables communication, comparison and direction at all levels of the ministry.
The process needs to be ongoing, embedded in the culture of the ministry
and have the potential to re-orient an organization in terms of performance
improvement. It is not about eliminating risk but about understanding,
managing and efficiently assigning risk.
Roles and Responsibilities
- Each ministry,
under the direction of the deputy minister, is responsible for developing
and implementing risk management plans as part of its service plan,
programs, and operations.
- The Risk
Management Branch (RMB) formulates and implements a series of comprehensive
risk management programs for the provincial public sector to manage
the risks to which it is exposed by virtue of its assets, programs and
operations.
RMB has four major
roles:
- Central agency for government risk management: risk management,
security, business continuity policy and advice, reviews and approves
indemnities given by government and government corporations, assists
ministries in establishing their ERM programs.
- Risk management advisory and consultation services: provides
a wide range of risk management services to the provincial public sector,
including professional advice and direction regarding risk mitigation,
loss control, security, risk financing, and risk identification and
transfer.
- Risk management program development and delivery: comprehensive
risk management programs that include risk financing, loss prevention
and claims management for the education and health care sectors, Crown
corporations, and organizations delivering government services under
contract. The government risk management framework is also used for
Crown corporation governance and major capital projects.
- Claims and litigation management: comprehensive claims and
litigation management services as well as specialized legal and risk
management advice to a wide range of client groups, with emphasis on
the health care and education sectors.
14.3
Policy
- Each ministry is responsible and accountable to Treasury Board for
developing, implementing and maintaining an Enterprise-wide Risk Management
(ERM) process. This includes the systematic application of management
policies, procedures and practices to the tasks of establishing the
context, and to identifying, analyzing, evaluating, treating, monitoring
and communicating risk.
- The deputy minister and executive are responsible for risk management
within their ministry.
- Each ministry must establish the context within which risk management
processes and structures deliver cost-effective risk management outcomes
that reflect key strategic, program and operational functions. The ministry
must define the criteria by which risks are evaluated and form the basis
of controls and management options.
- Each ministry must develop and maintain the culture, processes and
accountability structures that facilitate comprehensive risk identification
of all strategic, program or operational risks for which the ministry
is responsible.
- The deputy minister and executive must undertake a risk analysis of
the ministry at a strategic level on an annual basis. Ministries must
analyze program and operational level risks regularly and update this
analysis on an annual basis at a minimum, or when significant program
changes occur.
- Each ministry must document risk treatment plans for implementation
when an evaluation reveals a degree of risk that exceeds predetermined
ministry tolerance levels.
- Each ministry is responsible for adapting the concept of risk treatment
to its operating environment and for ensuring risk treatment is an active
part of its risk management process. The ministry must adopt appropriate
methods to fund risk treatment.
- Each ministry must retain risks that remain after control and treatment
measures have been taken. To assure the budgets of individual divisions
or branches can withstand significant risk of loss the ministry must
maintain a tiered loss absorption mechanism. A ministry must not directly
or indirectly purchase insurance for any purpose.
- Each ministry must develop and apply mechanisms to ensure ongoing
monitoring of risks. The ministry must have a well-developed monitoring,
reporting and documentation system in place for all levels of the organization.
- Each ministry must foster active communication and consultation with
internal and external stakeholders throughout the risk management process.
Communication plans should be developed to address issues relating to
risks themselves and the risk management process.
14.4
Information and References
Risk Management Branch
(RMB): supports the development and implementation of comprehensive risk
management programs for the provincial public sector (including ministries,
Crown corporations, government agencies and contracted service agencies).
Enterprise-wide Risk
Management (ERM): How successfully a ministry deals with risk can have
a major impact on the accomplishment of key strategic and operational
goals. An ERM framework, provided by RMB, provides useful reference information
for ministries that are developing risk processes and techniques. The
Guidelines, Risk Dictionary and supplemental materials are available at
the RMB intranet address: http://www.min.fin.gov.bc.ca/.
This site is limited to users that have Government of British Columbia
intranet access only.
All readers can obtain
additional information through the RMB internet site: Risk
Management Branch or by contacting RMB by telephone: 250 356-1794.
RMB addresses are:
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Mailing
Address:
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Physical
Address:
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PO
BOX 9405 STN PROV GOVT Victoria V8W9V1
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595
Pandora Street 3rd Floor Victoria BC V8W 1N5
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