1. The Foreign and Commonwealth Office (FCO) deals with risk management every day. Examples of risk management include managing risks that affect UK nationals abroad and managing the risks to UK interests from overseas events.
2. The FCO Risk Management Framework is designed to help the FCO deal with the risks to its organisation and Objectives in a systematic fashion, both at home and abroad. The aim of the framework is to ensure that risk management becomes integrated into all levels of the FCO's decision making process, and that risks to FCO Objectives are efficiently identified, assessed, managed and reviewed.
3. The FCO works towards delivering seven high level Objectives underpinned by 12, more specific, Public Service Agreement (PSA) targets. These targets are the key commitments that the FCO has agreed to deliver in return for the resources granted in the Spending Review settlement of 2002.
For more information please use the link provided: FCO Aims and Objectives
Defining Risk and Risk Management
4. Risk is 'uncertainty of outcome, whether positive opportunity or negative threat, of actions or events: the combination of likelihood and impact, including perceived importance.'
5. Risk management is 'all the processes involved in identifying, assessing, and judging risks, assigning ownership, taking actions to mitigate or anticipate them, and monitoring and reviewing progress.'
6. Risk management involves taking a structured view about the most important risks to a business, assessing their likelihood and impact, and making sure that thought has been given to how these risks can be minimised, and to how they would be dealt with if they materialised.
7. Understanding the principles of sound risk management is the foundation for successful innovation in decision making.
Whitehall and Risk Management
8. In November 2002, the Cabinet Office published a report Risk: Improving government's capability to handle risk and uncertainty A central recommendation in the report was to implement a comprehensive programme of change to improve risk management across government. This programme has a two-year timetable to tie in with the 2004 Spending Review.
9. Each Department is now required to produce a Statement on Internal Control (SIC) in its annual accounts, including: a summary of the Department's processes for handling risk; a description of how current initiatives are being implemented; and, where processes are not in place, plans for addressing gaps. For more information on the FCO Resource Accounts use the link provided.
FCO Risk Management Framework
10. The FCO Board approved a new FCO Risk Management Framework on 28 January 2003. As well as meeting the risk management requirements of the SIC, the Framework is intended to spread best practice throughout the FCO in a way that is relevant to the FCO. Its premise is that risk management is an integral part of good management. Risk management is at the heart of foreign policy formulation, fundamental to programme and project management, and a key consideration in deciding, for example, when to open the Emergency Units and update FCO Travel Advice.
11. The FCO Risk Management Framework contains a number of actions designed to help the FCO deal with the risks to its Objectives and organisation more systematically, at home and abroad. Amongst the actions included are:
- A monthly review to monitor risks to the FCO's PSA targets. Each monthly Board discusses risks to the delivery of one of the FCOs 12 PSA targets, and agrees on any actions that are needed to mitigate these risks.
- The creation of a Top Risks Register, covering the main risks to the FCO, including policy, reputational, financial, security, and estate risks. The FCO Board reviews the Register every six months or more frequently, if risks threaten to materialise.
- Factoring in risk assessments when formulating policy, to ensure that policies are risk aware, rather than risk averse.
- The development and delivery of risk management training in order to embed risk management theory and practice throughout the FCO.
- The enhancement of internal control systems in order to minimise financial and other organisational risks.
Examples of Risk Management in the FCO
12. The FCO's consular service offers advice and assistance to British citizens who travel abroad. With British nationals now making over 53 million overseas trips a year, the FCO Consular Directorate has implemented risk management practices in order to ensure immediate, high quality services to British nationals abroad. Examples include:
- The establishment of three rapid deployment teams, drawn from staff from all parts of the FCO. The teams are on permanent standby, ready to leave their regular jobs to give assistance whenever and wherever a crisis may arise;
- The creation of a permanently staffed 24-hour response centre, which will provide a continuous capability to manage crises and a single point of contact for members of the public. Staff are trained in all aspects of crisis management, and will support the rapid deployment teams wherever they are stationed abroad;
- Issuing revised guidance on Travel Advice to all Posts and Directorates. This guidance aims to standardise both the language of advice across all Posts and the frequency of the advice updates.