The Governance Institute of Australia is an independent professional association that focuses on governance and draws its membership from chartered secretaries, governance leaders and risk managers. Its 2019 Risk Management Survey (Survey) is a new initiative, designed to identify the key governance risks facing Australian organisations and gauge how well organisations are proactively managing them. The online survey, which was conducted between 3 April and 3 May 2019, invited responses from 33,000 Governance Institute of Australia members, partners and subscribers. Of the 499 respondents, 20 per cent were from the financial services sector, 17 percent from healthcare, 15 percent from education, 11 per cent from professional and technical services and 11 per cent from the public sector.
Regulatory or Legislative Change Seen as the Biggest and Best Managed Risk
According to the media release that accompanied the release of the Survey, Regulatory or Legislative Change was chosen almost unanimously across all respondents as the top risk for both the next 12 months and the next three to five years. The Chief Executive Officer of the Governance Institute of Australia is quoted as observing that the Survey demonstrates that there is much confusion among organisations about reporting requirements, roles and engaging the newly strengthened regulators.
Other high-scoring risks are Brand and Reputational Damage, Increased Competition, Talent Attraction and Retention, and Cyber-crime.
For respondents from the education sector, the top five risks over the next 12 months are: Brand and Reputational Damage, Regulatory or Legislative Change, Increased Competition, Talent Attraction and Retention and Economic Shock. While the top five risks over the next three to five years were identified as: Regulatory or Legislative Change, Increased Competition, Brand and Reputational Damage, Disruption/Failure to Innovate and Talent Attraction and Retention.
The Survey also asked respondents about their organisations’ preparedness to meet the risks, with Regulatory or Legislative Change receiving the highest score. The risks that had the lowest ratings in terms of preparedness were Talent Attraction and Retention, and Disruption/Failure to Innovate.
For respondents from the education sector, the risks best identified and managed by their organisations were Staff Conduct, Regulatory or Legislative Change and Brand and Reputational Damage. Consistent with overall responses, the least well managed risks are Talent Attraction and Retention and Disruption/Failure to Innovate.
What Can Schools Do About the Risks that are Least Well Managed?
Many of the risks identified by the respondents to the Survey for the education sector are consistent with the risks identified, but not ranked, in our recent White Paper, 12 Key Risks for School Boards to Consider in 2019. We recommend that schools, who have not already done so, download a copy of the White Paper to read through the key strategic risks that have been identified for each Key Risk.
For the education sector respondents, the two least well managed risks were Talent Attraction and Retention and Disruption/Failure to Innovate. The Key Risks in our White Paper don’t match the exact language of the risks described in the Governance Institute of Australia Survey; however, we would argue that they align clearly as noted below.
On the subject of Human Resources and Talent Management (Talent Attraction and Retention), we cited recent reports that teachers’ workloads are increasingly demanding, and that the sector will face a critical shortage of principals in the coming years. There is therefore a critical need for schools’ board and leadership to focus on the training, development, performance, support and retention of high-quality staff.
Some questions to consider:
- Does your school’s board receive regular reports on non-financial human resources issues such as staff turnover and retention, internal grievances, remuneration in comparison with industry benchmarks, training and professional development and the completion of performance reviews?
- Does your school conduct regular surveys of staff satisfaction and school culture?
- Does your school have a comprehensive policy framework for addressing the training, development, performance, support and retention of high-quality staff?
- Does your school provide regular, meaningful professional development for staff that supports the school’s objectives and grows staff capability?
On Technology Advancement (Disruption/Failure to Innovate) in Schools, we suggested your school’s board might start thinking (if it does not already) about what the world will look like in 20 to 30 years’ time, and how that will affect your current approach to resource allocation.
Some questions to consider:
- Does your school have an effective IT governance plan? Does it reflect your school’s appetite for more innovative (and potentially risky) approaches to the introduction of new technology?
- Has your school’s board identified new and potentially disruptive technologies that will affect your school?
- How do you manage compliance with privacy and data privacy laws?
- How well do you manage the disruptions from the short-term failures of technology systems? Do you have in place and test a critical incident response plan and business interruption plan that reflects your school’s size and level of complexity?
- How does your school manage increasing quantities of data?
- How do you ensure new technological systems can integrate effectively with existing systems?
One welcome finding from the Survey was that 70 per cent of respondents agreed or strongly agreed with the proposition that Risk Management was highly valued by their organisation, although the need for “better tools and resources” to manage risk and “clarity of purpose and strategy” were key areas of concern.