At the highest level, risk management is about making informed decisions about what we do, setting expectations for ourselves and our stakeholders. Risk management is at the core of good management, identifying what could stop the NZDF achieving its objectives and acting to reduce the likelihood of the event(s) as well as mitigating the impact if the event(s) does occur.
Risk Management Framework
The Risk Management Framework (RMF) is a key element of the NZDF’s overall governance framework. The Framework includes the risk management policy, principles and processes and provides uniform processes to identify; measure; treat and report on key risks. It supports the Executive Leadership Team’s (ELT’s) corporate governance needs and senior management accountability responsibilities. It helps to strengthen the organisation’s management practices in a manner demonstrable to external stakeholders. The uniform risk management process can be applied to any activity regardless of its size, nature or duration.
One outcome of an effective RMF is that risk management is embedded into the NZDF's behavioural culture, whereby all personnel are aware of the risks inherent in their day-to-day work processes and are able to identify risks related to the pursuit of opportunities.
Policy
The NZDF’s risk management policy and risk management principles are detailed in Defence Force Order (DFO) 81, Risk Management. The Risk Management Policy is supported by a set of Risk Management Principles to govern what is acceptable and expected of all NZDF personnel with regards to risk management.
Risks to NZDF Strategic Objectives
The NZDF is exposed to a wide range of risks to the successful achievement of its objectives. These risks arise from sources within and external to the organisation. Listed below are examples of the significant risks currently facing the NZDF. The organisation may:
- fail to realise the full benefits from major change initiatives;
- be unable to recruit sufficient personnel in uniform in critical trades due to a combination of demographic changes and a shrinking labour market;
- have insufficient capital funding to support future capability development due to the impact of inflation; and
- have insufficient operating funding to support future capability delivery due to the impact of inflation on consumables such as e.g. fuel, ammunition and other military consumables.
Risk Mitigation
Risks to the strategic and operational objectives are mitigated by the existing control environment. Where controls are ineffective, or do not exist (for example in relation to emerging risks), appropriate treatment activity is either in progress or is under development (for example the Defence Transformation Programme).
Previous | Contents | Next