Implementation of Enterprise Risk Management: A Case Study of a Public Sector Entity in the Northern Cape, South Africa
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Published:
Feb 29, 2024
Keywords:
Enterprise Risk Management, Risk Management, Public Sector Risk, Risk Management Process
Main Article Content
Abstract
Since the advent of South Africa's democracy in 1994, there has been an increasing demand by stakeholders for several public services due to a variation of complex and challenging events that have taken place and reported both in social and academic circles. In the context of the Northern Cape, there has been a continued increase in unemployment and poor service delivery coupled with an inability of the Department of Economic Development and Tourism (DEDaT) to achieve clean audit reports from the Auditor-General of South Africa (AGSA). This development raises questions about the implementation of ERM processes. Thus, this study aimed to assess the implementation of ERM processes using DEDaT as a case study. The study sought to determine the ERM systems currently deployed and the extent to which the ERM components are utilized by DEDaT. Data was gathered through in-depth interviews using a qualitative approach. A sample of eighteen participants who are ERM role players at DEDaT described their knowledge and experiences on the implementation of ERM systems and how the components are applied. From the findings, two main themes, namely, ‘ERM systems deployed at DEDaT’ and ‘perceptions on ERM components that are utilized,' emerged with related subthemes. The study revealed that DEDaT has ERM systems in place, however there were gaps in key areas that need improvement to enhance the ERM instrument. Furthermore, the research found that a set of eight components were utilized to implement the ERM process. The study suggested recommendations to management for further research and policy direction on implementing ERM in the public sector.
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Moses, R., & Obioha, O. (2024). Implementation of Enterprise Risk Management: A Case Study of a Public Sector Entity in the Northern Cape, South Africa. PanAfrican Journal of Governance and Development (PJGD), 5(1), 106-127. https://doi.org/10.46404/panjogov.v5i1.5363
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Research-based/ Original Articles
References
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Alvarez, G. (2005). Operational Risk: Practical Approaches to Implementation. London: Risk
Books.
Auditor-General. (2019). Report of the auditor-general to the Northern Cape Provincial
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Bakar, B.E., Rasid, S.Z.A., Rizal, A.M. & Baskaran, S. (2019). Risk management practices to
Strengthen Public Sector Accountability. Asian Journal of Business and Accounting,
12(1), 1-40.
Bowen, G.A. (2009). ‘Document analysis as a qualitative research method’. Qualitative
Research Journal, 9(2), 27-40.
Bowen, J.K., Cassel, R., Dickson, K., Fleet, M. & Ingram, D. (2006). Enterprise Risk
Management Specialty Guide (ERMSG).
Braig, S., Gebre, B. & Sellgren, A. (2011). Strengthening risk management in the US public
sector. McKinsey Working Papers on Risk.
Branson, B.C. (2010). The role of the Board of Directors and Senior Management in
Enterprise Risk Management. In: J Fraser & B J Simkins (Eds.). Enterprise risk management: Today's leading research and best practices for tomorrow's executives. New Jersey: John Wiley & Sons, Inc.
Braun, V. & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research
in Psychology, 3(2), 77-101.
British Standards Institution. (2011). Risk Management Code of Practice and guidance for the
implementation of BS ISO 31000, Sims Group UK.
Caron, F., Vanthienen, J. & Baesens, B. (2013). A comprehensive investigation of the
applicability of process mining techniques for enterprise risk management. Computers
in Industry, 64(4), 464-475.
Chapman, R.J. (2011). Simple tools and techniques for enterprise risk management. (2nd d.).
Chichester: John Wiley & Sons, Ltd.
Coffey, A. & Atkinson, P. (1996). Making sense of qualitative data: Complementary research
strategies. Thousand Oaks, CA: Sage Publications Inc.
Committee of Sponsoring Organisations of the Treadway Commission. (2012).
Understanding and Communicating Risk Appetite. Durham.
Committee of Sponsoring Organisations of the Treadway Commission. (2004). Enterprise
Risk Management: Integrated Framework.
Creswell, J. & Poth, C.N. (2017). Qualitative inquiry and research design: choosing among
five approaches. (4th ed.). CA: Sage Publications Inc.
Department of Economic Development and Tourism. (2019). Annual Report. Kimberley:
SwiftPrint.
Department of Economic Development and Tourism. (2018). Annual Report. Kimberley:
SwiftPrint.
Department of Economic Development and Tourism. (2017). Annual Report. Kimberley:
SwiftPrint.
Department of Economic Development and Tourism. (2016). Annual Report. Kimberley:
SwiftPrint.
Department: Statistics South Africa. (2019). Quarterly Labour Force Survey, Quarter 2.
Retrieved http://www.statssa.gov.za/publications/P0211/P02112ndQuarter2019.pdf
Dickinson, G. (2001). Enterprise risk management: Its origins and conceptual foundation.
The Geneva Papers on Risk and Insurance, 26(3), 360–366.
Ene, N.C. & Dobrea, C.R. (2006). Adapting risk management principles to the public sector
reforms. Administratie Si Management Public, 6 (1), 126-130.
Frigo, M.L. & Anderson, R.J. (2011). Strategic Risk Management: A Foundation for
Improving Enterprise Risk Management and Governance. The Journal of Corporate Accounting & Finance, 22(3), 81-88.
Funston, R. (2003). Creating a Risk-intelligent Organization: Internal Auditor, 60(2), 59–63.
Gates, S., Nicolas, J-L. & Walker, P. (2012). Enterprise risk management: A process for
enhanced management and improved performance. Management Accounting
Quarterly, 13(3), 28-38.
Gherai, D.S. & Balaciu, D.E. (2013). Role of Internal Auditing in Risk Management in the
Public Sector and Local Entities - Case Study Bihor Country. The Journal of the
Faculty of Economics, 1(1), 1324-1333.
Hampton, J.J. (2015). Fundamentals of enterprise risk management: How Top Companies
Assess Risk, Manage Exposure, and Seize Opportunity. (2nd ed.). New York: American Management Association.
Hollman, K.W. & Forrest, J.E. (1991). Risk Management in a Service Business. International
Journal of Service Industry Management, 2(2), 49-65.
Hopkin, P. (2017). Fundamentals of Risk Management: Understanding, evaluating and
implementing effective risk management. (4th ed.). New York: Kogan Page.
Hopkin, P. (2014). Fundamentals of risk management: Understanding, evaluating, and
implementing effective risk management. (3rd ed.). New York: Kogan Page.
Hopkin, P. (2010). Fundamentals of Risk Management: understanding, evaluating and
implementing effective risk management. London: Kogan Page Limited.
Kapuscinska, K.Z. & Matejun, M. (2014). Risk management in Public Sector Organisations:
A case study. International Journal of Business and Management Studies, 3(3), 129-
143.
Kenosi, R. (2016). National Treasury Risk Management Forum, [PowerPoint presentation],
National Treasury: Pretoria.
Keith, J.L. (2014). Enterprise risk management: Developing a strategic ERM alignment
framework (Doctor of Philosophy Thesis). London: Brunel University.
Kiger, M.E. & Varpio, L. (2020). Thematic analysis of qualitative data: AMEE Guide No.
131, Teacher, 1-13. Retrieved from https://doi.org/10.1080/0142159X.2020.1755030.
King, J.L. (2001). Operational risk: measurement and Modelling. New York: John Wiley &
Sons, Ltd.
Kong, Y., Lartey, P.Y., Bah, F.B.M. & Biswas, N.B. (2018). The value of public sector risk
management: An empirical assessment of Ghana. Administrative Science, 8(40): 1-18.
Lam, J. (2003). Enterprise Risk Management: From Incentives to Controls. New Jersey: John
Wiley & Sons, Inc.
Leopoulos, V.N., Kirytopoulos, K.A. & Malandrakis, C. (2006). Risk management for SMEs:
Tools to use and how. Production Planning & Control, 17(3), 322-332.
Leveson, N. (2004). A New Accident Model for Engineering Safer Systems. Safety Science,
42(4), 237-270.
Leung, F. & Isaacs, F. (2008). Risk management in public sector research: approach and
lessons learned at a national research organization. R&D Management, 38(5), 510-
519.
Littlejohn, S.W. & Foss, K.A. (2005). Theories of human communication. (8th ed.).
California: Thomas Wadsworth.
Marchetti, A.M. (2012). Enterprise Risk Management Best Practices: From Assessment to
Ongoing Compliance. New Jersey: John Wiley & Sons, Inc.
Martin, J. & Wanna, J. (1996). Financial Risk in the Public Sector: The Accountability
Dilemmas of Entrepreneurialism. In: J Wanna, J Forster & P Graham (Eds.).
Entrepreneurial Management in the Public Sector. South Melbourne:
MacMillan Education Australia Pty Ltd.
McPhee, I. (2005). Risk and Risk Management in the Public Sector - Pubic Sector and
Governance Forum.Australian National Audit Office: Canberra.
Merna, T. & Al-Thani, F. (2008). Corporate Risk Management. 2nd ed. Chichester: John
Wiley & Sons, Ltd.
Moeller, R.R. (2007). COSO Enterprise risk management: Understanding the new integrated
ERM Framework. New Jersey: John Wiley & Sons, Inc.
National Treasury. (2010). Public Sector Risk Management Framework. Republic of South
Africa. National Treasury. http://oag.treasury.gov.za/dev/print.asp?ContentId=669. Accessed 1 September 2010.
Nel, D. (2019). Risk management in the South African local government and its impact on
service delivery. International Journal of Management Practice, Inderscience
Enterprises Ltd, 12(1), 60–80.
Nilsen, A.S. & Olsen, O.E. (2005). Different Strategies: Equal Practice? Risk Assessment
and Management in Municipalities. Risk management: An International Journal, 7(2), 37-47.
Nocco, B.W. & Stulz, R.M. (2006). Enterprise Risk Management: Theory and Practice.
Journal of Applied Corporate Finance, 18(4), 8-20.
Ogutu, J., Bennett, M.R. & Olawoyin, R. (2018). Closing the gap: between traditional and
enterprise risk management systems. Professional Safety, 63(4), 42-47.
Panda, B. & Leepsa, N.M. (2017). Agency theory: Review of Theory and Evidence on
Problems and Perspectives. Indian Journal of Corporate Governance, 10(1), 74-95.
Papadopoulou, L., Kavoulakos, K. & Avramidis, C. (2021). Intermedia agenda setting and
grassroots collectives: Assessing global media’s influence on greek news outlets.
Studies in Media and Communication, 9(2), 12-23.
Paraschivescu, A.O. (2016). Risk Management and Quality Management an Integrate
Approach. Economy Transdisciplinarity Cognition, 19(1), 55-61.
Perry, J.G. & Hayes, R.W. (1985). Risk and its management in construction projects. Proc
Institute Civil Engineering, 1(78), 499-521.
Rae, K., Subramaniam, N. & Sands, J. (2008). Risk Management and Ethical Environment:
Effects on Internal Audit and Accounting Control Procedures. Journal of Applied
Management Accounting Research, 6(1), 11-30.
Rasmussen, J. (1997). Risk management in a dynamic society: A modeling problem. Safety
Science, 27(2/3), 183-213.
Reding, K.F., Sobel, P.J., Anderson, U.L., Head, M.J., Ramamoorti, S., Salamasick, M &
Riddle, C. (2013). Internal Auditing, Assurance & Advisory Services. 3rd ed. Florida: The Institute of Internal Auditors Research Foundation.
Ring, P.J., Bryce, C., McKinney, R. & Webb, R. (2016). Taking notice of risk culture – the
regulator’s approach. Journal of Risk Research, 19(3), 364-387.
Rossouw, J.P. (2018). Factors affecting implementation of risk management systems at
municipalities in the Overberg District, South Africa (MTech dissertation). Cape
Town: Cape Peninsula University of Technology.
Rouse, M. (2010). Definition: Enterprise Risk Management. Retrieved from
http://searchcio.techtarget.com/definition/enterprise-risk-management.
Shortreed, J. (2010). ERM Frameworks. In: J Fraser & B J Simkins (Eds.). Enterprise risk
management: Today’s leading research and best practices for tomorrow’s executives
New Jersey: John Wiley & Sons, Inc.
South African Government. (1993). Occupational Health and Safety Act, 1993 (Act 85 of
1993).
Taran, Y., Boer, H. & Lindberg, P. (2013). Incorporating Enterprise Risk Management in the
Business Model Innovation Process, Journal of Business Models, 1(1), 38-60.
Times Live. (2018). The building where the fatal fire started was bad‚ but it was not the
worst, 06 September 2018. https://www.timeslive.co.za/news/south-africa/2018-09-06-building-where-fatal-fire- started-was-bad-but-it-was-not-the-worst/.
Valsamakis, A.C., Vivian, R.W. & Du Toit, G.S. (2000). Risk management. 2nd ed.
Johannesburg: Heinemann Publishers (Pty) Ltd.
Yin, R.K. (2003). Case study research: Design and Methods. 3rd ed. California: Sage
Publication Inc.
Young, J. (2006). Operational Risk Management – The Practical Application of a Qualitative
Approach. Pretoria: Van Schaik Publishers.
European Journal of multidisciplinary studies, 2(5), 323-329.
Alvarez, G. (2005). Operational Risk: Practical Approaches to Implementation. London: Risk
Books.
Auditor-General. (2019). Report of the auditor-general to the Northern Cape Provincial
Legislature on vote no. 6: Department of Economic Development and Tourism.
Bakar, B.E., Rasid, S.Z.A., Rizal, A.M. & Baskaran, S. (2019). Risk management practices to
Strengthen Public Sector Accountability. Asian Journal of Business and Accounting,
12(1), 1-40.
Bowen, G.A. (2009). ‘Document analysis as a qualitative research method’. Qualitative
Research Journal, 9(2), 27-40.
Bowen, J.K., Cassel, R., Dickson, K., Fleet, M. & Ingram, D. (2006). Enterprise Risk
Management Specialty Guide (ERMSG).
Braig, S., Gebre, B. & Sellgren, A. (2011). Strengthening risk management in the US public
sector. McKinsey Working Papers on Risk.
Branson, B.C. (2010). The role of the Board of Directors and Senior Management in
Enterprise Risk Management. In: J Fraser & B J Simkins (Eds.). Enterprise risk management: Today's leading research and best practices for tomorrow's executives. New Jersey: John Wiley & Sons, Inc.
Braun, V. & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research
in Psychology, 3(2), 77-101.
British Standards Institution. (2011). Risk Management Code of Practice and guidance for the
implementation of BS ISO 31000, Sims Group UK.
Caron, F., Vanthienen, J. & Baesens, B. (2013). A comprehensive investigation of the
applicability of process mining techniques for enterprise risk management. Computers
in Industry, 64(4), 464-475.
Chapman, R.J. (2011). Simple tools and techniques for enterprise risk management. (2nd d.).
Chichester: John Wiley & Sons, Ltd.
Coffey, A. & Atkinson, P. (1996). Making sense of qualitative data: Complementary research
strategies. Thousand Oaks, CA: Sage Publications Inc.
Committee of Sponsoring Organisations of the Treadway Commission. (2012).
Understanding and Communicating Risk Appetite. Durham.
Committee of Sponsoring Organisations of the Treadway Commission. (2004). Enterprise
Risk Management: Integrated Framework.
Creswell, J. & Poth, C.N. (2017). Qualitative inquiry and research design: choosing among
five approaches. (4th ed.). CA: Sage Publications Inc.
Department of Economic Development and Tourism. (2019). Annual Report. Kimberley:
SwiftPrint.
Department of Economic Development and Tourism. (2018). Annual Report. Kimberley:
SwiftPrint.
Department of Economic Development and Tourism. (2017). Annual Report. Kimberley:
SwiftPrint.
Department of Economic Development and Tourism. (2016). Annual Report. Kimberley:
SwiftPrint.
Department: Statistics South Africa. (2019). Quarterly Labour Force Survey, Quarter 2.
Retrieved http://www.statssa.gov.za/publications/P0211/P02112ndQuarter2019.pdf
Dickinson, G. (2001). Enterprise risk management: Its origins and conceptual foundation.
The Geneva Papers on Risk and Insurance, 26(3), 360–366.
Ene, N.C. & Dobrea, C.R. (2006). Adapting risk management principles to the public sector
reforms. Administratie Si Management Public, 6 (1), 126-130.
Frigo, M.L. & Anderson, R.J. (2011). Strategic Risk Management: A Foundation for
Improving Enterprise Risk Management and Governance. The Journal of Corporate Accounting & Finance, 22(3), 81-88.
Funston, R. (2003). Creating a Risk-intelligent Organization: Internal Auditor, 60(2), 59–63.
Gates, S., Nicolas, J-L. & Walker, P. (2012). Enterprise risk management: A process for
enhanced management and improved performance. Management Accounting
Quarterly, 13(3), 28-38.
Gherai, D.S. & Balaciu, D.E. (2013). Role of Internal Auditing in Risk Management in the
Public Sector and Local Entities - Case Study Bihor Country. The Journal of the
Faculty of Economics, 1(1), 1324-1333.
Hampton, J.J. (2015). Fundamentals of enterprise risk management: How Top Companies
Assess Risk, Manage Exposure, and Seize Opportunity. (2nd ed.). New York: American Management Association.
Hollman, K.W. & Forrest, J.E. (1991). Risk Management in a Service Business. International
Journal of Service Industry Management, 2(2), 49-65.
Hopkin, P. (2017). Fundamentals of Risk Management: Understanding, evaluating and
implementing effective risk management. (4th ed.). New York: Kogan Page.
Hopkin, P. (2014). Fundamentals of risk management: Understanding, evaluating, and
implementing effective risk management. (3rd ed.). New York: Kogan Page.
Hopkin, P. (2010). Fundamentals of Risk Management: understanding, evaluating and
implementing effective risk management. London: Kogan Page Limited.
Kapuscinska, K.Z. & Matejun, M. (2014). Risk management in Public Sector Organisations:
A case study. International Journal of Business and Management Studies, 3(3), 129-
143.
Kenosi, R. (2016). National Treasury Risk Management Forum, [PowerPoint presentation],
National Treasury: Pretoria.
Keith, J.L. (2014). Enterprise risk management: Developing a strategic ERM alignment
framework (Doctor of Philosophy Thesis). London: Brunel University.
Kiger, M.E. & Varpio, L. (2020). Thematic analysis of qualitative data: AMEE Guide No.
131, Teacher, 1-13. Retrieved from https://doi.org/10.1080/0142159X.2020.1755030.
King, J.L. (2001). Operational risk: measurement and Modelling. New York: John Wiley &
Sons, Ltd.
Kong, Y., Lartey, P.Y., Bah, F.B.M. & Biswas, N.B. (2018). The value of public sector risk
management: An empirical assessment of Ghana. Administrative Science, 8(40): 1-18.
Lam, J. (2003). Enterprise Risk Management: From Incentives to Controls. New Jersey: John
Wiley & Sons, Inc.
Leopoulos, V.N., Kirytopoulos, K.A. & Malandrakis, C. (2006). Risk management for SMEs:
Tools to use and how. Production Planning & Control, 17(3), 322-332.
Leveson, N. (2004). A New Accident Model for Engineering Safer Systems. Safety Science,
42(4), 237-270.
Leung, F. & Isaacs, F. (2008). Risk management in public sector research: approach and
lessons learned at a national research organization. R&D Management, 38(5), 510-
519.
Littlejohn, S.W. & Foss, K.A. (2005). Theories of human communication. (8th ed.).
California: Thomas Wadsworth.
Marchetti, A.M. (2012). Enterprise Risk Management Best Practices: From Assessment to
Ongoing Compliance. New Jersey: John Wiley & Sons, Inc.
Martin, J. & Wanna, J. (1996). Financial Risk in the Public Sector: The Accountability
Dilemmas of Entrepreneurialism. In: J Wanna, J Forster & P Graham (Eds.).
Entrepreneurial Management in the Public Sector. South Melbourne:
MacMillan Education Australia Pty Ltd.
McPhee, I. (2005). Risk and Risk Management in the Public Sector - Pubic Sector and
Governance Forum.Australian National Audit Office: Canberra.
Merna, T. & Al-Thani, F. (2008). Corporate Risk Management. 2nd ed. Chichester: John
Wiley & Sons, Ltd.
Moeller, R.R. (2007). COSO Enterprise risk management: Understanding the new integrated
ERM Framework. New Jersey: John Wiley & Sons, Inc.
National Treasury. (2010). Public Sector Risk Management Framework. Republic of South
Africa. National Treasury. http://oag.treasury.gov.za/dev/print.asp?ContentId=669. Accessed 1 September 2010.
Nel, D. (2019). Risk management in the South African local government and its impact on
service delivery. International Journal of Management Practice, Inderscience
Enterprises Ltd, 12(1), 60–80.
Nilsen, A.S. & Olsen, O.E. (2005). Different Strategies: Equal Practice? Risk Assessment
and Management in Municipalities. Risk management: An International Journal, 7(2), 37-47.
Nocco, B.W. & Stulz, R.M. (2006). Enterprise Risk Management: Theory and Practice.
Journal of Applied Corporate Finance, 18(4), 8-20.
Ogutu, J., Bennett, M.R. & Olawoyin, R. (2018). Closing the gap: between traditional and
enterprise risk management systems. Professional Safety, 63(4), 42-47.
Panda, B. & Leepsa, N.M. (2017). Agency theory: Review of Theory and Evidence on
Problems and Perspectives. Indian Journal of Corporate Governance, 10(1), 74-95.
Papadopoulou, L., Kavoulakos, K. & Avramidis, C. (2021). Intermedia agenda setting and
grassroots collectives: Assessing global media’s influence on greek news outlets.
Studies in Media and Communication, 9(2), 12-23.
Paraschivescu, A.O. (2016). Risk Management and Quality Management an Integrate
Approach. Economy Transdisciplinarity Cognition, 19(1), 55-61.
Perry, J.G. & Hayes, R.W. (1985). Risk and its management in construction projects. Proc
Institute Civil Engineering, 1(78), 499-521.
Rae, K., Subramaniam, N. & Sands, J. (2008). Risk Management and Ethical Environment:
Effects on Internal Audit and Accounting Control Procedures. Journal of Applied
Management Accounting Research, 6(1), 11-30.
Rasmussen, J. (1997). Risk management in a dynamic society: A modeling problem. Safety
Science, 27(2/3), 183-213.
Reding, K.F., Sobel, P.J., Anderson, U.L., Head, M.J., Ramamoorti, S., Salamasick, M &
Riddle, C. (2013). Internal Auditing, Assurance & Advisory Services. 3rd ed. Florida: The Institute of Internal Auditors Research Foundation.
Ring, P.J., Bryce, C., McKinney, R. & Webb, R. (2016). Taking notice of risk culture – the
regulator’s approach. Journal of Risk Research, 19(3), 364-387.
Rossouw, J.P. (2018). Factors affecting implementation of risk management systems at
municipalities in the Overberg District, South Africa (MTech dissertation). Cape
Town: Cape Peninsula University of Technology.
Rouse, M. (2010). Definition: Enterprise Risk Management. Retrieved from
http://searchcio.techtarget.com/definition/enterprise-risk-management.
Shortreed, J. (2010). ERM Frameworks. In: J Fraser & B J Simkins (Eds.). Enterprise risk
management: Today’s leading research and best practices for tomorrow’s executives
New Jersey: John Wiley & Sons, Inc.
South African Government. (1993). Occupational Health and Safety Act, 1993 (Act 85 of
1993).
Taran, Y., Boer, H. & Lindberg, P. (2013). Incorporating Enterprise Risk Management in the
Business Model Innovation Process, Journal of Business Models, 1(1), 38-60.
Times Live. (2018). The building where the fatal fire started was bad‚ but it was not the
worst, 06 September 2018. https://www.timeslive.co.za/news/south-africa/2018-09-06-building-where-fatal-fire- started-was-bad-but-it-was-not-the-worst/.
Valsamakis, A.C., Vivian, R.W. & Du Toit, G.S. (2000). Risk management. 2nd ed.
Johannesburg: Heinemann Publishers (Pty) Ltd.
Yin, R.K. (2003). Case study research: Design and Methods. 3rd ed. California: Sage
Publication Inc.
Young, J. (2006). Operational Risk Management – The Practical Application of a Qualitative
Approach. Pretoria: Van Schaik Publishers.