Adapting enterprise risk management principles to local government in a developing country

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Abstract

This article seeks to analyze the role enterprise risk management (ERM) theory plays in consequence management (CM) in the South African local government context. We advance the argument that CM, which is regarded as the synchronization of initiatives undertaken to respond and lessen the impacts of a security-related occurrence, has not been fully exploited in the local government set-up. The South African local government has been haunted by service rendering challenges due to a lack of leadership ethics among other maladministration practices (Kroukamp & Cloete, 2018). As such, they have faced some challenges in the adoption of effective, efficient, and economic actions that ensure potential risks and attacks are identified before inflicting damage to the welfare of the citizens. The study adopts a qualitative literature analysis to generate its findings. Findings reveal that the core principles of ERM, like assessment of risks and culture, threat strategic planning and objective setting, risk in implementation, risk information, interaction, reporting, and monitoring ERM performance, have the potential to enhance CM in the context of local government. ERM framework can help municipalities to understand their organizational culture and climate, and the successful implementation and management of organizational change since it provides organizations with effective governance measures such as oversight, structure, and culture that are needed to establish the goals of the organization, the means to pursue them and the ability to understand any associated risks.

Keywords: Enterprise Risk Management, Consequence Management, Service Delivery, Local Government

Authors’ individual contribution: Conceptualization — S.L. and O.I.N.; Methodology — N.S.; Validation — S.L., O.I.N., and N.S.; Formal Analysis — S.L., O.I.N., and N.S.; Investigation — S.L., O.I.N., and N.S.; Resources — S.L.; Data Curation — S.L.; Writing — Original Draft — S.L., O.I.N., and N.S.; Writing — Review & Editing — S.L., O.I.N., and N.S.; Visualization — S.L., O.I.N., and N.S.; Supervision — S.L., O.I.N., and N.S.; Project Administration — S.L.; Funding Acquisition — S.L.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: H1, H11, H12

Received: 18.01.2023
Accepted: 11.10.2023
Published online: 13.10.2023

How to cite this paper: Lungisa, S., Nzewi, O. I., & Sikhosana, N. (2023). Adapting enterprise risk management principles to local government in a developing country. Journal of Governance & Regulation, 12(4), 38–49. https://doi.org/10.22495/jgrv12i4art4