State of the service

Managing risk in the APS

APS agencies do different work in different contexts. All need to manage risk effectively. The APS views risk management as a priority. An important dimension is the impact that effective risk management has on productivity.

Highly risk averse organisations can miss out on innovations and the resulting productivity gains. Alternatively, organisations that embrace too many risky propositions can suffer the negative impacts of those risks.

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) requires agencies establish and maintain appropriate systems and internal controls for the oversight and management of risk. The Commonwealth Risk Management Policy supports the PGPA Act and requires that each agency develop a policy and approach to managing risk.

Results of the 2017 APS employee census indicate that awareness of how their agency managed risk is common amongst APS employees. Seventy per cent of respondents are aware of their agency’s framework for managing risk or knew where to find it.

Awareness of risk management frameworks was found to increase with the decision making authority of the respondent. As the strategic decision makers within APS agencies, Senior Executive Service (SES) employees are most likely to be aware of their agency’s risk management framework.

Figure 1: Awareness of risk management frameworks by actual classification

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The majority of SES respondents to the 2017 APS employee census hold positive views regarding their agency’s approach to managing risk. Seventy per cent indicated that they apply their agency’s risk management framework when making decisions.

Figure 2: SES attitudes towards risk management

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The relationship between risk management and innovation is supported by results of the 2017 APS employee census. Eighty-five per cent of APS respondents who are aware of their agency’s framework for risk management also believe that one of their responsibilities is to look for new ways to improve the way they work. Only 66 per cent of those were not aware of their agency’s risk management framework thought the same. This group were also more likely to believe that they were not responsible for innovating.

Figure 3: Views towards innovation

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The APS will continue in its efforts to prioritise effective risk management. This will position it to reap the benefits of innovation and improved productivity.


1 Comment

  1. Russell Ayres

    This analysis (especially Figure 3) seems to assume a simple, uncomplicated relationship between risk management and innovation, ie that being innovative means managing risk, and vice versa. In fact, the relationship is far more complex – and interesting – than this. There are times when the best innovation may arise through ignoring or setting to one side ‘best practice’ risk management, by taking ‘calculated’ (or sometimes uncalculated) risks. We have all heard from celebrated innovators who say ‘I didn’t really know what I was doing or what risks I was taking, but I got lucky’. In an institution like the APS, which is inherently risk-averse, this means that there are relatively few examples of ‘throw caution to the wind’ innovation. That does not mean there is no innovation, just that it is more likely to be incremental and managed rather than leaps into the unknown.

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