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Relevance of Risk Management in governance and corporate entities

Relevance of Risk Management in governance and corporate entities

Some civil servants will say that the government has taken out insurance policy, and there is no need to worry.  (Insuring everything on sight) e.g. how would you cover the trauma of a civil servant or his family who have got an accident or fire disaster or theft, mistrust created among the workers leading to malicious damage, loss of good will and reputation.  Imagine the loss that would increase by the nation, through improper handling of petroleum and flammable objects, disposing of cigarettes in the dustbin causing a fire, taps unattended causing leakage and flooding-water damage. Bad electricity, plumbing, current exposure leading to fire. Improper handling of keys by staff leading to theft for which there is no forcible entry or exit, lack of proper training of drivers on defensive driving and maintenance of vehicles, heath risk to employees through lack of clean working environment; – oil, gas and minerals, factory mishandling and its effect is on the environment. 

Just recently we heard of a fatal road accident claiming the lives of many citizens, while others badly injured and hospitalized.  America, Australia and Japan, with all their sophisticated technology had difficulties in fighting, controlling and preventing bush fire, the credit crunch, property crunch etc., a nation with a fledging economy like ours will collapse if hit by any major disaster. 

The need for Risk Management awareness should be given a priority as not all losses are insured or insurable, you will agree with me that there is a general saying that Prevention is better than Cure; however as an Insurer and a Risk Management Advocate I will say Prevention is Better than Compensation. 

It is also true that accidents can never be totally eliminated but risk management which enhances loss prevention and minimization should be the first line of defence.  The commitment must come from the top hierarchy of government and should be given a priority. In order to achieve a Risk Management conscious society, with solution, we all have responsibility to carry.

 Just listen to Mr. X. “It won’t happen to me”. Sure they happen to all those unfortunate people out there, not me”. As long as people continue to wear these self distractive blinkers, accidents will keep touching new heights in the offices, on the road, or elsewhere. 

The fact that the majority of these unfortunate events, accidents, are attributed to human error proves that they are manmade and are therefore preventable. Can we afford such loses? Remember the 21st June, 1975 storm that destroyed the FBC building, fire at state lottery, City Council, flood at Youyi Building, fire at Ministry of Lands, the National Social Security and Insurance Trust (NASSIT) Building, the Attitudinal and Behavioural Change (ABC) Secretariat, etc. 

Can we now stand by and watch such wanton destruction of Government property and other National wealth? Shouldn’t these be prevented? The task is Herculean. What is needed is an organized effort to wake up civil servants out of their apathy, to educate them on the courses and magnitude of these risks and consultants have been doing since the year 2000, when it was launched by the then Minister of Finance Dr. James Jonah, an occasion that was ably chaired by Justice Laura Marcus Jones.  The ultimate mission was the creation of a safe enabling environment to work and to live in. hence, Risk Management is a shared responsibility. 

Risk Management is a new concept that in Sierra Leone but its importance cannot be understated.  Risk Management access is the least democratic.  Insurance is the most fundamental need of the poor, and the most neglected up till now, especially so in Africa and Sierra Leone in particular. As a nation we can only realise its fullest potential if the Government, individual, corporate, and institutional bodies wake up to the challenge that our society will increasingly become complex and we can only forge ahead by adopting a serious and co-ordinated approach to Risk Management. To do otherwise will spell doom on this nation. 

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  • Not all risks can be transferred or financed by insurance. You can’t claim the costs of high turnover, low productivity, inadequate cash flow or a damaged reputation. While the traditional insurance agency model ignores these types of uninsurable risks altogether. Work with an insurance company that will conduct a thorough analysis of your risks and develops a comprehensive insurance and risk management solution to address all of the costs that can impact your bottom line.
    Than Nguyen

    01/28/2012

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