Enterprise Risk Management Framework - National Treasury



Public Sector Risk Management Framework

Guidebook: Risk management policy

(for the purposes of this guideline, the term “Institution” refers to National Departments, Provincial Department, Constitutional Institutions, Public Entities, Provincial Entities, Municipalities (Metropolitan, Local and District) and Municipal Owned Entities)

Note: All underlined words in this document contain a link to a relevant example, guidebook or template. If you click on the link it will open the relevant document automatically.

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Contents

1 Introduction 1

2 Deliverable 1

3 How to draft a risk management policy 2

Introduction

It is important that the Accounting Authority / Officer sets the right tone for risk management in the institution. Although all staff will be aware of the need to prevent loss and to safeguard stakeholders’ interests, they may not be quite so clear about the institution’s standpoint on risk.

It is therefore common for the Accounting Authority / Officer to publish a risk management policy. This is a statement that declares the institution’s commitment to risk management.

The risk management policy will outline the institution’s commitment to protecting the institution against adverse outcomes, which may impact negatively on service delivery. It will also confirm the institution’s commitment to legal and regulatory compliance.

Deliverable

The risk management policy is a brief statement about the institution’s commitment to risk management. It can be replicated in the risk management plan. It is advisable to publish and circulate the risk management policy to existing and new staff as part of the risk awareness strategy.

How to draft a risk management policy

A risk management policy communicates the institution’s stance with regard to risk management. The risk management policy is informed by the institution’s risk profile, appetite for risk, loss tolerance levels, regulatory compliance expectations, safety and health demands, sustainability management, corporate governance requirements etc.

The risk management policy may state the accountability for risk management, as well as responsibilities for risk management at various levels within the institution. The risk management policy is drafted in consultation with key stakeholders.

The risk management policy should be reviewed at least annually to reflect the current stance on risk management.

Click here for an example of a risk management policy.[pic]

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RISK

RISK MANAGEMENT

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RISK MANAGEMENT

RISK

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