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, related to:
- Assessment and understanding of risks (Cluster A: 10 deficits)
- Management of risks (Cluster B: 13 deficits)