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Risk is inherent in all aspects of a council’s activities. Risk management is therefore an integral part of good governance, good management practice and decision making in local government. Risk management is not about being risk averse. Risk management allows councils to take appropriate risks that will help them to achieve their strategic goals.
A council with robust risk management practices is accountable, effective and efficient.
Risk management is a process that allows councils to pursue opportunities, while understanding and mitigating associated risks. The benefits to a council of a coordinated, systematic approach to risk management include:
The purpose of risk management is not to eliminate all risks but, rather, to reduce them to a level acceptable to council in accordance with its risk tolerance limits. Risk management requires a mature, proactive approach to management, and achieving a balance between the costs of managing risks and the anticipated benefits.
The following webpages provide more detailed information on the risk management process: