The NZDF believes that effective risk management is part of an organisations behavioural culture. All personnel are aware of risks in their day to day work processes and are able to identify the risks related to the pursuit of opportunities.
The NZDF knows the importance of understanding risks as both threats and opportunities. By managing opportunities well, we will be in a better position to deliver future military capability in support of Government policies.
The NZDF is endeavouring to set a new standard for risk management that will improve and expand its risk management capacity without adding unnecessary process.
Risk Management Framework
The NZDF Risk Management Framework (RMF) requires that the organisation demonstrate it is actively managing risk. Our risk management framework provides personnel with the tools to take risk management activity beyond a compliance exercise.
Risk management in the NZDF is:
- part of all governance processes;
- integrated into the development and implementation of any business plan, policy, programme or project;
- actively improving the flow of risk information across the NZDF to ensure we manage risk collaboratively;
- a process requiring risks associated with strategically important activities to be reported by management, within their area of responsibility (Strategic Objective Risk Profile); and
- viewed as an ongoing process with the focus on continual enhancement.
Strategic Objective Risk Profile
The Strategic Objective Risk Profile (SORP):
- identifies current and emerging risks to the successful achievement of the NZDF strategic objectives;
- provides an overview of key treatments in place or planned to address unacceptable risks;
- prioritises the risks and identifies the actions required to mitigate these risks; and
- the action planned for each risk to demonstrate effectiveness in reducing the level of risk to match or fall below the risk appetite of the Executive Leadership Team.
Overview of current SORP
The NZDF is exposed to a wide range of risks to the successful achievement of its objectives. Listed below are examples of the significant risks currently facing the NZDF. The organisation may:
- be unable to attract and retain key staff, experiencing loss of institutional knowledge and increased skill gaps;
- not realise full benefits from continuous improvements and transformation initiatives, failing to unlock resources for re-investment in our people and capabilities;
- have insufficient capital funding to support future capability development; and
- experience shortfalls in operating funding due to the impact of inflation on consumables.
Risk Mitigation
Risks to the strategic and operational objectives of the NZDF are mitigated in the first instance by the existing control environment. Internal controls are designed to provide reasonable assurance regarding the achievement of objectives.
Where insufficient control is identified appropriate treatment activity is developed and implemented. These can take the form of Strategic Initiatives, for example:
- Work Force Planning Strategy: provides the overarching guidance for the development, implementation, administration and evaluation of HR strategy planning, policy and practice within the NZDF
- Defence Transformation Programme: developing opportunities to deliver our outputs more efficiently and effectively;
- Capability Management Framework: formalising the structure and processes for the acquisition of major new and replacement military capabilities; and
- NZDF Five-Year Resource Plan: the medium and long term operating and capital requirements of the NZDF to achieve the NZDF’s Strategic Objectives.
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