IRGC - International Risk Governance Council

Risk Governance Deficits - Project Overview

• Risk Governance Deficits - Project Overview
• Case Studies
• Application Guidelines

A risk governance deficit is a failure in the identification, framing, assessment, management and communication of a risk issue or of how it is being addressed. As such, it can also be understood as a risk governance challenge. Governance deficits are common. They may be found throughout the risk handling process, and limit its effectiveness. They are actual and potential shortcomings and can be remedied or mitigated.

Potential consequences of risk governance deficits can include:

• Lost opportunities
• Costs incurred owing to inefficient regulations
• Loss of public trust
• Inequitable distribution of risks and benefits between countries, organisations and social groups
• Excessive focus on high profile risks, to the neglect of higher probability but lower profile risks
• Failure to move from ‘business as usual’ and trigger action

Over the course of this project (2009/2010), IRGC has worked to identify and describe the causes of the most commonly occurring risk governance deficits with the aim of helping governments, regulators and private sector actors to better understand how these deficits occur and how they can be minimised. Developing such an understanding is important for dealing with new risks and, in some cases, this can lead to the revision of approaches to existing risks.

Risk governance deficits operate at various stages of the risk governance process, from the early warnings of possible risk to the formal stages of assessment, management and communication. For conceptual clarity, the deficits identified by IRGC have been divided into two categories: those related to the assessment and understanding of risks (10 deficits); and those related to the management of risks (13 deficits).

Some examples of risk governance deficits include:

Assessment and understanding of risks
 The missing, ignoring or exaggeration of early signals of risk
 The lack of adequate, factual knowledge about a risk
 The provision of biased, selective or incomplete information about a risk

Management of risks
 The failure to anticipate side effects of risk management
 The failure to implement and enforce risk management decisions
 The lack of imagination and capacity to face the unexpected

Past examples of both positive and negative risk governance were examined, both to verify the relevance of the risk governance deficits identified and to illustrate them and their impacts:

 Hurricane Katrina: the poor handling of the crisis and the misunderstanding of the dynamics of complex systems;
 Bovine Spongiform Encephalopathy (BSE): false assurances from the UK government and overstating or understating the degree of certainty;
 Genetically modified crops in Europe: the failure to address issues of public perception and the subsequent failure to set an internationally coherent set of regulations;
 Electromagnetic Fields (EMF): the challenges of dealing with uncertainty in mobile telephones and power lines;
 Fisheries depletion: the absence of a cohesive strategy or norms to deal with a common problem;

A description of the deficits and their impact, including illustrations in the form of case studies, can be found in the IRGC report “Risk Governance Deficits: An analysis and illustration of the most common deficits in risk governance” (available for download on top of this page). The report also includes summaries of the case studies. The full-length case studies can be found here. A policy brief on risk governance deficits, including policy recommendations, is also available for download above.

The list of risk governance deficits and case studies were developed following a series of expert workshops held in Zurich and Geneva (November 2007, June 2008, November 2008 and June 2009). Participants comprised an international group of experts in risk assessment and management from government, academia, private industry and international organisations.

Valuable contributions to this project have been made by IRGC’s partners. IRGC would like to thank the Crisis and Risk Network (Center for Security Studies, ETH Zurich) and Swiss Reinsurance Company for their work on the risk governance deficits report, and staff at Oliver Wyman’s New York office for assistance in drafting the policy brief. Project work on risk governance would not have been possible without the generous support of IRGC’s donors, including the Swiss State Secretariat for Education and Research, the Swiss Agency for Development and Cooperation, the Government of Quebec, Alpiq Group, Swiss Reinsurance Company and Oliver Wyman Inc.

Download:

 Risk governance deficits (Concept Note) [PDF], IRGC, May 2009
 Risk governance deficits (Report) [PDF], IRGC, December 2009
 Risk governance deficits (Policy Brief) [PDF], IRGC, May 2010
 Applications guidelines, currently under development

Contact:

For more information on the Risk governance deficits project, please contact Diane Boulay