Managing in a Changing Operating Environment
This section:
- describes risks that could hinder our delivery of the Government's priorities
- discusses how we will manage these risks.
The specific risks faced by the Ministry
The two external factors with the most immediate impact on the Ministry's operating environment are the challenge for the Ministry to respond to the priorities of a new Government, and the effects of the deteriorating economic situation.
A number of risks arise from these changes in our operating environment. These include:
- failure to respond quickly enough to changing priorities
- failure to focus on the activities that will make the biggest difference in changing circumstances
- failure to ensure that our internal control environment and supporting management systems respond to these external changes.
- We have also identified a number of ongoing operating risks. These are:
- inappropriate advice that results in major unintended consequences
- risks arising from our internal management systems (such as our financial systems) not working as they should
- individuals acting in a fraudulent or criminal way, or without sufficient probity
- failure to prepare for instances outside our control (such as natural disasters)
- failure in the management of, or delivery of services by, the Crown entities monitored by the Ministry
- technology or other failures in our public-facing services.
How we will manage these risks
We anticipate changes in our operating environment by carrying out annual forward-looking scans of external developments and reviewing similar scans by other organisations.
We will ensure that the Ministry responds quickly to changing priorities by regularly reviewing our progress and priorities with our Ministers. We will adjust our work programme, including individual performance agreements, accordingly. To facilitate this, we expect all our managers to anticipate and respond appropriately to change.
We will remain focused on the activities that will make the biggest difference in current circumstances through analysis of international literature on what drives productivity improvement, research on the economic challenges in New Zealand, discussions with key stakeholders, evaluation of our major policy interventions, and use of high-quality policy processes that take account of all this information and knowledge.
We will regularly review and update our internal control processes so that they continue to take account of external changes, through our risk management framework – described in more detail below.
We will deliver policy advice that is high quality and takes account of possible consequences, by running robust quality assurance processes for policy advice and by building staff capability.
We will maintain sound relationships with Crown entities and ensure, through our monitoring and advisory role, that they are focused on the Government's priorities.
We will manage our other ongoing operating risks through core management systems, audits and risk profiling, quality management, business continuity planning, well-designed contracts with suppliers, and the work of an IT Governance Committee to support decision-making on IT capability.
How our risk management framework helps us assess and manage risk
The Ministry's risk management framework allows us to anticipate and manage risk on an ongoing basis.
We oversee and manage our overall set of risks and risk management framework through a Risk Management and Assurance Committee, which includes external members to provide independent perspectives. This committee reviews a rolling three-year business assurance work programme, which evaluates and tests the adequacy and effectiveness of the Ministry's governance, risk management processes, systems of internal control, and overall quality of performance.
We also carry out operating reviews to assess our organisational performance, financial position, and compliance with statutory and internal policy requirements on a quarterly basis. We continually refine our management strategies in light of the conclusions.
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