Risk management has enhanced its relevance over the past 15 years due to the increased number of unpredictable and extraordinary events (e.g. natural disasters, climate change, pandemic) that influence the choices and ways of organizing business. Nevertheless, the governing of risk is still highly undeveloped for many organizations. This research aims to provide an assessment of whether, how and to what extent organisations make sense of the identification and analysis of a systemic view of risks and their ability to develop decision-making processes, practices, systems and tools to govern them. We adopt a concept of systemic view of risk to refer to a set of interconnected aspects to the governing of risks: e.g. safety, environmental, social and strategic-operational.
We propose to analyse the systemic view of risk through the lens of a revised governing based framework, including the stakeholder engagement process as a value-adding component for co-governing risks with the help of engaged third-parties. The framework comprises the following dimensions:
- Visibility: how and under what circumstances a systemic-based view of risks is conceptualized and made visible
- Measurability: it is the process through which risk is measured by adopting specific and ad hoc calculative-based techniques
- Controllability: the ability of designing and implementing effective control systems to plan, monitor and assess risk's magnitude
- Communication: what, how and to what extent reporting mechanisms are implemented to disclose the management of risks and related performance.
The project focuses on 5 main businesses categories: large sized for profit companies, non profit companies, cooperatives, public utility organizations, SMEs - and 3 WPs: systematic literature review (WP1); content analysis (WP2); clinical analysis based on a comparative case study involving companies (WP3).
2 on-line workshops, 1 conference, 3 papers, and 1 book are the attended scientific results.
The project is relevant for two main reasons.
- First, the risk management literature has promoted significant debate and identified the need to adopt a more systemic view on the topic (Bebbington and Larrinaga, 2014; Williams et al., 2017; 2019). The actual way of managing risks by organisations may not be adequate because of a narrow focus on financial aspects. We argue that risk management should be conceptualized from a systemic perspective, to be able to ensure human wellbeing (Raworth, 2017) and a safe humanity space (Whiteman and Williams, 2019), while staying within planetary boundaries (Steffen et al., 2015) and guarantee organisational financial performance and stability. At the present, current analysis on risk taking a systemic view is relatively scarce. As stated by Whiteman and Williams (2019), it is important to understand the ¿complex role of organizations as collective contributors to and recipients of multi-perspective risks (Whiteman and Williams, 2019, p. 213). While the risk management literature is sufficiently vast, it has not widely and organically addressed the managerial and organizational practices through which a systemic view of risk is conceptualised, measured, controlled and reported (Bundy et al., 2017; Linnenluecke, 2017; Miller et al., 2008).
- The second important reason concerns the need for organisations to become more aware of their ability to adopt (or do not) a systemic view of risk. Risk management is a crucial but still highly undervalued activity for many organizations (ANRA and Protiviti, 2020; Cineas and Mediobanca, 2019). The project aims to cover this gap. Indeed, the research provides an assessment of whether, how and to what extent organisations make sense of the identification and analysis of a systemic view of risks and their ability to develop decision-making processes, practices and tools to govern them (Whiteman and Williams, 2019). The project enables to assess the strengths and weaknesses of organizations¿ current practices, outlining a sort of guide to support the decision making of organizations. The final aim is to make organisations¿ managerial systems and decision-making processes more inclusive by incorporating formal aspects and metrics related to the systemic-view of risks, and better conceptualise these risks.
The project¿s specific outcomes create impacts at different levels:
a) NEW CHALLENGES:
- Developing new knowledge on the concept of risk, and its nature
- Supporting a stable and stronger economy for and with people and environment: the COVID-19 pandemic has highlighted how organizations are not only exposed to a health risk but also how their contribution is vital to deal with sustainability. An appropriate risk management contributes to guarantee the protection of employees, workers and, more broadly, all citizens affected by business activities, as well as how the natural environment and resources are at risk. This is the premise for a stable and stronger economy (as stressed widely by the EU Commission). Moreover, a systemic view of risk governing requires organizations to adopt a mulstistakeholder approach
- Providing a practical protocol for each type of organizations, based on their differences, looking specifically at those organizations that intend to adopt a systematic approach to manage their risks. The protocol will help in the definition of guidelines aiming to support organizations to look towards a more sustainable economic growth, as indicated in the SDG8.
Moreover, the project will lead to more conscious investments in innovations (such as a dashboard providing a systemic analysis of risk or dialogic stakeholder engagement processes)
b) IMPACT OF THE PROJECT (scientific results)
- 1 Final conference organized in Rome
- 3 Scientific publications
- 1 Book summarizing the project¿s results
- 2 on line workshops with external partners
c) AGENDA 2030 SDGs IMPACTED
SDG 3 (Good health and well-being)
SDG 7 (Affordable and clean energy)
SDG 8 (Decent work and economic growth)
SDG9 (Industry, innovation and infrastructure)
SDG11 (Sustainable cities and communities)
SDG12 (Responsible consumption and production)
SDG13 (Climate action)