Why Is Risk Management So Critical in the Public Sector?

Piers Kelly
May 17, 2022

Risk management plays a crucial role in the corporate governance of public sector organisations. It involves building structures and mapping out processes that contribute to both strategic and operational success.

Risk Management

This article will provide a thorough explanation of what risk management in the public sector is, why it’s so important and highlight examples of potential challenges linked to public sector risk management.

What Is Public Sector Risk Management and Why Is It So Important?

Public sector organisations will always face different risks that could potentially impact their operation and reputation. These risks can be divided into areas such as financial, compliance, technological and political.

To effectively identify these risks and have suitable measures in place to cause minimal impact; public sector organisations should create a risk management strategy.

A dedicated risk management team should coordinate a strategy. Their role is to capture relevant risks at each organisational tier and monitor the completion of planned mitigating actions to decide whether to escalate the risk.

Change is one of the most critical elements of potential risk and the public sector is currently undergoing an era of significant change. This era of change has accelerated by digital transformation, Brexit and the challenges caused by the pandemic.

Risk management enables public sector organisations to become more reactive to change and make better decisions on how they can operate more effectively in the future, ultimately leading to better citizen outcomes and improved internal efficiency.

However, there are several challenges linked to having an effective risk management strategy in place and public sector organisations must overcome these.

What Are the Associated Challenges Linked to Public Sector Risk Management?

The fast-changing landscape of the public sector can make it difficult for public sector organisations to mitigate risks both efficiently and effectively. However, there are some specific reasons why organisations might find the subject even more challenging than it needs to be:

Lack of Integration


Risk management should play a vital role in the overall strategy of any organisation. Its importance should be embedded into every department so they become more risk-aware when making decisions.

Many organisations find it challenging to integrate risk management into their operation at a departmental level. Instead, the risk management team becomes a silo, leading to poor communication and an abdication of responsibility from individuals.

A Misunderstanding of Risk Management


A lack of employee understanding of the purpose and relevance of risk management can also lead to challenges.

Some may just regard it as a compliance exercise without fully appreciating its importance to the organisation and how it can contribute to overall success. This leads to employees continuing to continue working using old approaches that can’t meet today’s expectations of minimising disruptions.

Instead, organisations need to gain buy-in from their employees during the initial stages of risk management implementation. This can be done by supporting them in embracing new technologies such as AI-driven threat analysis and orchestration.

Growing Privacy Concerns


The introduction of Data Protection (GDPR) has also presented risk management challenges for the public sector.

Data plays a crucial role in minimising risks in areas such as cybercrime and terrorism. However, data protection laws have made it much easier for organisations to breach privacy.

To overcome these challenges related to privacy, public sector organisations need to invest in updating their security solutions, which play a crucial role in managing data safely and using it to aid organisational decisions.

Want to Know More About Public Sector Risk Management and How to Overcome These Challenges?

Join us at the 8th Annual Digital Government Conference on the 18th May, where we’ll look deeper into the latest policy announcements and their impact on ICT functions while exploring cutting edge solutions for delivering better, more efficient public services.

Everything you need to know is covered in the link below.

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