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What is the purpose of the Integrated Risk Management Framework?
The Integrated Risk Management Framework is intended to provide guidance to departments and agencies in order to advance the use of a more corporate and systematic approach to risk management.
It proposes a set of risk management practices that departments and agencies can adopt, or adapt, to their specific circumstances and mandate. It will support the desired cultural shift to a “risk-smart” workforce where public service employees can develop new skills, be more creative and innovative, while providing them with essential tools to help them be prudent in protecting the public interest and maintaining public trust.
What are the main highlights of the Integrated Risk Management Framework?
The main highlights of the Framework are:
- A practical guide to assist public service employees to think more strategically and improve their ability to set common priorities.
- The Framework is comprised of four elements:
- Developing the Corporate Risk Profile
- Establishing a Risk Management Function
- Practising Integrated Risk Management
- Ensuring Continuous Risk Management Learning
- Provides a comprehensive approach to better integrate risk management into existing decision-making structures.
- Provides departments and agencies with a mechanism to develop an overall perspective on strategic risks by creating the means to discuss, compare and evaluate substantially different risks on the same page.
- Covers all aspects and levels of an organization, from strategy to operations, and all types of risks (operation, legal, reputation, health, safety, environment, financial, etc.)
- Encourages creativity and innovation while recognizing the need to be prudent in protecting the public interest and maintaining public trust.
- Helps employees develop new skills and strengthen their ability to anticipate, assess and manage risk.
- Provides concepts and guidelines designed to assist departments and agencies to improve their ability to manage risk.
How will this Framework improve management practices and ensure that the Government meets the needs of Canadians?
The Integrated Risk Management Framework is an essential part of the Government’s management agenda and a key element in its efforts to modernize management practices and to be more citizen-focused.
This commitment to strengthen risk management is clearly articulated in the Government of Canada’s management framework Results for Canadians.
- It states that an integrated risk management framework will be developed and adapted for use by departments and agencies.
The Framework is linked with other Government of Canada risk management initiatives, including recent efforts to strengthen the internal audit and evaluation
functions and increase the focus on monitoring across government. Combined, these initiatives will contribute to improving the way government manages its programs and services and meets the needs of Canadians.
The Framework builds on existing risk management practices, reflects current thinking, best practices and the value of well-recognized principles for risk management.
Are departments and agencies required to follow this new Framework?
Departments and agencies are encouraged to follow this new Framework. The Framework fills the recognized need and benefit for accessible guidance to advance the use of a more corporate and systematic approach to risk management in departments and agencies. TBS strongly encourages all public service employees to become familiar with the principles of this Framework and practise integrated risk management. TBS will be working closely with departments and agencies on implementation.
How and when will this Framework be implemented in departments and agencies?
TBS will actively work with departments and agencies to implement the Framework. The Framework will be implemented in phases, then rolled-out to all departments and agencies, over time, based on lessons learned from pilot implementation.
The TBS Centre of Expertise for risk management will provide overall guidance and advice to help departments and agencies implement the Framework as well as identify and share risk management best practices.
I was unaware that there was a Treasury Board policy on risk management, what does it cover?
The TB policy has been in existence for twenty years and was last updated in 1994. The objective of the policy is to ensure that departments manage their risks. More specifically, departments are to ensure responsible management and must safeguard government property, interests and certain interest of employees during the conduct of government operations.
The underlying principle of the policy is that every decision, strategy or activity has a degree of risk. The policy prescribes a high-level, generic process for managing government risk. The process focuses on the identification, minimization and containment of risk and unwanted consequences. The policy also provides guidelines on risk management strategies and financing options to minimize cost.
The policy is complemented by other subject-specific policies, which provide additional guidance on managing risk in specific contexts (i.e. claims and ex gratia payment policy; volunteers policy; indemnification of crown servants and indemnification in contracting; occupational health and safety policies; project management policy, security policy; etc).
What is the relationship between the Integrated Risk Management Framework and the Risk Management Policy?
The Integrated Risk Management Framework and Risk Management policy are distinct policy instruments written at different times. Each reflects the risk management thinking and management philosophy at the time they were developed.
Will the Integrated Risk Management Framework replace the Risk Management Policy?
No. The Integrated Risk Management Framework and Risk Management Policy will co-exist for the time being.
The Integrated Risk Management Framework is more aligned with today’s risk management thinking and Treasury Board’s management board philosophy. The Integrated Risk Management Framework builds on elements of the current risk management policy and provides departments with greater flexibility. The Framework presents a broader, more holistic and integrated approach to risk management. Notwithstanding all this, the risk financing/self-underwriting element of the current policy has not been incorporated in the Framework, which is why the policy is being retained for the time being.
What will happen to the TB policy with the approval and issuance of the Integrated Risk Management Framework?
For the time being the Integrated Risk Management Framework and Risk Management Policy will co-exist. TBS will work collaboratively with departments and other TBS policy centres to determine whether there is still a need for the current policy and if so, what revisions are necessary.
Given the release of the Integrated Risk Management Framework will the principle of self-underwriting, contained in the Risk Management Policy, be retained?
It is very likely that the principle of self-underwriting, or financing, losses will be retained. The federal government has a large resource base and application of this principle has proven to be cost-effective over time.
If Treasury Board elects to move away from self-underwriting government losses will there be additional funds available to departments to purchase commercial insurance or finance other forms of protection?
No additional funding will be available to purchase commercial insurance. The decision to purchase commercial insurance must be cost-effective and be based on a business case.
Is there a willingness to explore other financing options, such as self-insurance or other central financing mechanisms, to fund losses resulting from risk management decisions?
Yes, other funding options can be explored. However, the current form of financing losses is administratively cost-effective and ensures the essential, and required, linkages between program delivery decision-making authority, responsibility and accountability. Under the current system, departments must be attentive to their risk issues otherwise it may result in undesirable and unfavourable funding pressures on their programs. TBS is prepared to consider other funding options proposed by departments provided the options can be demonstrated to be administratively cost-effective for the government as a whole and respects the basic principles and linkages between decision-making authority and accountability. Since the introduction of other financing options would be a deviation from the current Policy, a formal submission would be required to seek TB Minister’s approval.
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