Brief report on describing risk governance with respect to risk analysis and perception of risks from a managers view. David D. Bustin

1. Running head: RISK GOVERNANCE 1
Risk Governance: A Manager’s Overview
David D. Bustin
Florida Institute of Technology

2. RISK GOVERNANCE 2
Risk Governance: A Manager’s Overview
Risk governance reaches beyond traditional risk analysis by including the involvement
and participation of stakeholders, in addition to, law, politics, economic, the environment, old
and new technologies, security, finance, and social frameworks, such as public health and safety
where risk undergoes evaluation and management. Risk governance is an interdisciplinary
subject of research that bases policy and guidance from areas such as toxicology, epidemiology,
psychology, sociology, anthropology, and economics.
Project risk governance is directed by components of oversight and control. Although
risk management strategies do not often embody escalation procedures, risk governance provides
guidance for the level of intervention and timing it is needed from other tiers.
Continuity of operations (COOPs) have progressively become an important necessity in
the past 16 years and is imperative to be included in risk processes. Risk management plans are
considered as an annex of the COOP. According to Pritchard, “the key to COOP is to address
any managerial actions, interfaces, and relationships that are not otherwise addressed in the risk
management plan as a whole.” During my work assignment in Sicily, we rehearsed a COOP
onsite before travelling to Badabag, Romania in support of Black Sea Rotational Forces. Our
COOP mission was to provide a mobile site for all communications needs and crisis response for
local maritime vessels, as well as, U.S. Marines and foreign militaries. Our capabilities enabled
seamless operations in the event of major communications disruptions. Daily operations of
mobile networks incorporated risk management in guidelines for configuration and processes of
the networks. Similarly, deploying the mobile networks during a COOP exercise is putting
practice into play. Pritchard’s definition of risk management is the process(es) by which risk
practices are applied, uniformly, from a managerial level. The authority on risk governance is

3. RISK GOVERNANCE 3
the International Risk Governance Council (IRGC) which conducts a global decentralized
organization in alliance with academic and scientific institutions and partners with the
International Standards Organization (ISO). IRGC describes risk governance in terms of change.
Any change is accompanied by some level of risk and the purpose of governing risk is to reduce
adverse outcomes to the lowest acceptable level while maximizing benefits. “Better risk
governance implies enabling societies to benefit from change while minimizing the negative
consequences of the associated risks (International Risk Governance Council, 2017).” Through
their cooperative alliances, risk governance standards and policies are developed. IRGC
functions to host workshops and conferences, provide education in risk governance for PhD level
or executives, and create policy based on thorough analysis for government, business, and the
risk community across many industries.
Risk is a mental perception, evaluated on experience, education or collaboration with
other people. These perceptions result in concepts formed by a consensus of scientist, general
public, stakeholder groups, or civil society. Each individual or group reacts to risk in accordance
with policy, law, self-interest, or industry standard. Accepting, avoiding, or transferring risk is a
determined by an entity’s risk appetite. “Risk perceptions belong to the contextual aspects that
risk managers need to consider when deciding whether or not a risk should be taken as well as
when designing risk reduction measures (Renn, 2010).” General guidance for handling risk has
been constructed by IRGC.
IRGC’s comprehensive risk governance framework entails four elements. These
elements include risk pre-assessment, risk appraisal, characterization and evaluation, and risk
management. Renn states that, “The four phases correspond to the two major challenges of risk
governance: generating and collecting knowledge about the risk and making decisions about how

4. RISK GOVERNANCE 4
to mitigate, control or otherwise manage it.” An understanding of each element is beneficial in
guiding a project team, manager, and stakeholder throughout the project. The pre-assessment
phase is the time when stakeholders evaluate risk and determine a mitigation strategy. The risk
appraisal formulates a scientific assessment of the risk and its probability in combination with a
systematic public concern assessment results as a decision base. The next phase, evaluation and
characterization, are closely related and combined into one phase. Risk in this phase is
categorized into acceptable, tolerable but needs mitigation, and tolerable or unacceptable
according to societal values affected by the risk. Risk management includes the managerial
responses and solutions needed to avoid, reduce, transfer, or retain risk. Risk communication is
the comprehension and involvement in the risk governance process. It is interrelated with each
of the four phases in the risk governance framework. All four phases, if properly conducted,
greatly reduces the chance of a deficit. Risk governance deficit is a failure in the identification,
framing, assessment, management and communication of a risk issue or of how it is being
addressed. Improperly or failing to handle risks pose consequences noted by IRGC.
Repercussions of risk governance deficit are lost opportunities, costs incurred owing to
inefficient regulations, loss of public trust, inequitable distribution of risks and benefits,
excessive focus on high profile risks, and failure to move from business as usual (IRGC, 2017).
Summary
Risk is involved in every aspect of life. It can be on the level of individual, group,
organization, national, or global. As time progresses, we encounter new and emerging risks
frequently and our ability to handle risks are improving. Technology is an area evolving faster
and broader than is possible to completely eliminate risks as new issues arise very frequently.
Implementing proper risk governance enables the best strategy to be put in place.

5. RISK GOVERNANCE 5
References
IRGC Risk Governance Framework. (n.d.). Retrieved May 31, 2017, from
https://www.irgc.org/risk-governance/irgc-risk-governance-framework/
OECD. (2014). Recommendation of the Council on the Governance of Critical Risks.
Better Policies for Better Lives. Retrieved May 31, 2017 from
http://www.oecd.org/gov/risk/Critical-Risks-Recommendation.pdf
Pritchard, C. L. (2015). Risk management: concepts and guidance. Boca Raton: CRC
Press.
Renn, O. (2010). Risk governance: coping with uncertainty in a complex world. London:
Earthscan.
U.S. Naval Forces Europe-Africa/U.S. 6th Fleet Public Affairs. Retrieved May 31, 2017
from http://www.navy.mil/submit/display.asp?story_id=80847