Page 67 - IRMSA Risk Report 2021

4.5 STATE COMPETENCIES

The state must have specific competencies. These fall into three broad categories: to protect and punish; to provide infrastructure
and serve; and to engage and collaborate.

The primary function of government is to protect the weak and vulnerable in society and punish lawbreakers. A secondary function
is to provide the infrastructure and services, either on their own or through public-private partnerships, to encourage investors
to risk capital – this by funding the businesses that provide the goods and services on which the economy is built, and from which
taxes are levied to fund the fiscus.

Professional bodies such as IRMSA and others, as well as the private and
NGO sector, should be engaged to assist with the risk-based decision-
making competencies required to do this – and to find solutions in
collaboration with government.

During these times of disruption and extreme uncertainty, government may also need to develop competence in performing
economic triage when deciding which institutions, industries and organisations to save and which to let go. State resources are
limited and giving a little aid to many organisations – but not enough to save any one of them – may be politically expedient but is
economically ineffective. Tough choices will need to be made in deciding which industries and/or organisations will yield the best
socio-economic return on investment.

The expectation is that the state would competently tackle corruption,
reduce crime, and create policy certainty to encourage investment and
halt capital and economic migration.

4.6 ORGANISATION COMPETENCIES

Organisations should have specific risk management competencies. Here we will consider four:
1. Holding a clear view of risk management
2. Robust decision-making capability
3. Dynamic planning
4. Agility in adapting and responding

The competencies discussed here are equally applicable to organisations in the public and private sector and, by extension, to
government.

1. HOLDING A CLEAR VIEW OF RISK MANAGEMENT
Any endeavour or business has a reason or motivation for doing what it does and not doing what it does not do. Organisations must
clarify what they want from risk management and how this supports the achievement of strategic objectives. An organisation must
know why it is pursuing risk management before it can become competent at managing risk. Without this clarity, an organisation
will not get value from risk management.

Only once an organisation knows and appreciates why risk management is valuable, will it support risk management and invite the
risk management professionals to engage in a meaningful way.

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