Risk management - law and governance:

Bridging the gap between action and (legal) actions.

Dr Michael Eburn

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“The Risk Society”.Beck, Ulrich (1992), Risk Society; towards a new modernity (Sage, London).

• Sees everything in terms of risk.• Leads to ‘The Risk Management of

Everything’.(Power, Michael (2004) The Risk Management of Everything (Demos, London)).

• Risk management implies risk can be managed – and leads to an expectation that poor outcomes = poor risk management. (Rochford, Francine (2007). ‘The Law of Negligence in a 'Risk Society’; Calculating Ideas of Reasonable Risk’. 16 Griffith Law Review 172).

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Risks can be managed:

• Risk management standards “are not specific to any industry or sector” and are intended to be applied “to any type of risk, whatever its nature”.(Standards Australia (2009) AS/NZS ISO 31000:2009 Risk Management Principles and guidelines).

• One risk is the risk of blame. If the risk of disaster cannot be eliminated, this risk needs to be managed too.

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“Experts

who are being made increasingly accountable for what they do are now becoming more preoccupied with managing their own risks. Specifically, secondary risks to their reputation are becoming as significant as the primary risks for which experts have knowledge and training.” (Power, M., The Risk Management of Everything (Demos, London 2004) 14).

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Are “experts … being made increasingly accountable”?• Consider:

– L’Aquilla Earthquake convictions;– Costa Concordia convictions;– UK incident controllers acquitted of

manslaughter;– Outcomes from the 2003 and 2009 Australian

wildfires.

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Strategies to manage the secondary risk.• Delegate the risk to others.• “Privatization and outsourcing … offer risk-

averse politicians a way to transfer liability.” (Hood, Christopher (2002). ‘The Risk Game and the Blame Game’. (37)1 Government and Opposition 15).

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“Shared responsibility”:

• May simply be trading the residual risk: For individuals a low probability, high risk

event; For managers a high probability, low

(primary) but high (secondary) risk event; BUT in catastrophic circumstances, neither

can cope.

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Potential solutions

• Manage expectations:– But hard when high expectations are

continually met.

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Adopt a systems approach to outcomes. (With apologies to the researchers from Beijing Normal University).

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Consider catastrophic incident compensation.

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Conclusion

• Accountability is a critical issues. • But individuals operate as part of complex

systems.• Finding personal fault may be justified but

should not be the first response.• Blaming does not equal learning.

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Thank you for your attention.

Dr Michael EburnANU College of LawThe Australian National UniversityCANBERRA ACT 0200AUSTRALIA

P: + 61 2 6125 6424E: michael.eburn@anu.edu.au