Tackling the deficiencies in risk governance

Could the oil spill in the Gulf of Mexico have been averted by addressing governance gaps early on? Could intelligence agencies have foreseen the 9/11 terror attacks? Could the spread of HIV/AIDS have been contained? Today it would be difficult to think of a world unaffected by these and other lesser known tragedies. The rigorous use of scenarios helps to ‘think the unthinkable’, to identify governance gaps and to contribute to a proactive risk management.

A new publication supported by Swiss Re takes a fresh look at lessons learned from catastrophic events and investigates the most common deficiencies in the processes governing risk.

The failure to think the unthinkable is one of many shortcomings in risk governance that can lead to widespread disaster and undesired consequences. To anticipate and better prepare for risks otherwise left undetected, decision-makers in government and industry need to be aware of possible blind spots in their own risk management strategies.

A new policy brief on "Risk Governance Deficits" published by the International Risk Governance Council provides a practical guide for public policy makers and business leaders to recognise such gaps. It identifies 23 deficits commonly prevalent in risk governance regimes and illustrates each of these using examples from past or present risk events. These range from the outbreak of BSE in the UK and Hurricane Katrina to electromagnetic fields and genetically modified organisms in Europe.

The analysis groups risk governance deficits into two broad categories, those related to the assessment of risks and those related to the management of risks. Early warning systems, for example, might have detected signs of the tsunami along the Indian Ocean in December 2004. But taking action on risks is guided by a different set of considerations, often involving tradeoffs. Enacting biofuel policies to boost energy security in the US, for example, has had negative impacts on food prices across the developing world and may increase emissions of indirect greenhouse gases.

In a highly interconnected world, unaddressed or underestimated risks may become tomorrow's crisis. The findings of the IRGC publication seek to contribute towards identifying governance gaps and strengthening the necessary defences.

View the policy brief and the full report:

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