In order for a Manager to be held responsible for managing all the risks involved in his/her Department's work, he/she must first understand precisely what those particular risks are. However, I have rarely seen specific training given to Managers as to where the major risks relevant to their respective Departments sit. Without boundary limits for risk management being provided, the area of risk to be managed by Managers can appear to be very wide, and much more than the average Manager would be able to handle. That is probably a major reason why a good number of the Department Managers I worked with genuinely believed that the ‘upper’ management levels of their corporation were responsible for taking care of all the risks involved in the business. What was not well understood, as I discovered through questioning various Managers, is that, as Martin Lipton has stated, the Board of Directors ‘cannot and should not be involved in actual day-to-day risk management’,14 and ‘Directors should instead, through their risk oversight role, satisfy themselves that the risk management policies and procedures designed and implemented by the company's senior executives and risk managers are consistent with the company's strategy and risk appetite … that necessary steps are taken to foster an enterprise-wide culture that supports appropriate risk awareness … and that ensures that risk-taking beyond the company's determined risk appetite is recognized and appropriately escalated …’15
It is therefore not surprising that I also found that a common misperception of the Managers I spoke to was that all they are required to do is ensure that others under their control ‘get on with doing the Project work properly’, which Hayday's findings seem to corroborate.16 That wrong view about who is responsible for managing the risks of doing the day job is probably the main reason why the interfaces between the different Departments are often not handled effectively. I am certain that, if they are honest with themselves, most Managers would acknowledge that they are aware of instances where they themselves failed to deal with some risks properly (particularly with inter-Departmental interfaces), which then resulted in avoidable (and thus personally embarrassing) delays occurring and/or rework becoming necessary.
Notes
1 1 Brady J. (Reprinted from Pharmaceutical Engineering) (January/February 2015). Risk assessment: issues and challenges. https://www.ispe.gr.jp/ISPE/07_public/pdf/201506_en.pdf (accessed 11 September 2018).
2 2 Colhoun C. and Haidar T. (for Oil & Gas iQ) – (15 April 2017). Death Of The MegaProject?: How to Solve the Problems Involved in the Oil & Gas Industry (accessed 26 April 2017).
3 3 Riskope Blog (3 April 2014). Let's define strategic, tactical and operational planning. https://www.riskope.com/2014/04/03/lets-define-strategic-tactical-and-operational-planning (accessed 5 September 2017).
4 4 Duell M., Tingle R. and Ferguson K. (For MailOnline) - (15 January 2018). Official probe is launched into Carillion fat cat bosses who changed the rules so they could keep their huge bonuses as their company crumbled leaving 23,000 jobs at risk and taxpayers facing a billion-pound bill. https://www.dailymail.co.uk/news/article-5269827/Government-contractor-Carillion-goes-liquidation.html (accessed 21 February 2018).
5 5 Fink D. (2013). Project Risk Governance: Managing Uncertainty and Creating Organisational Value, Chapter 3.
6 6 Watt A. (14 August 2014). Project Management. Chapter 13, Procurement Management, Contract Types, Cost-Reimbursable Contracts. https://opentextbc.ca/projectmanagement/chapter/chapter-13-procurement-management-project-management (accessed 17 October 2018).
7 7 With all due deference to Gilbert & Sullivan (respectively, lyricist and composer) and their much-acclaimed comic opera, ‘The Pirates of Penzance’.
8 8 KPMG International Cooperative (March 2015). Global construction survey 2015 – climbing the curve. https://www.assets.kpmg.com/content/dam/kpmg/pdf/2015/04/global-construction-survey-2015.pdf (accessed 20 April 2017).
9 9 Carnet E., Hultin H. and Haidar T. (for Oil & Gas iQ) – (30 October 2017). Why your oil and gas projects are dying from rework. https://www.oilandgasiq.com/oil-and-gas-production-and-operations/whitepapers/why-your-oil-and-gas-projects-are-dying-from (accessed 29 November 2017).
10 10 Fiatech (November 2011). An introduction to ISO 15926, p. 68. https://www.scribd.com/document/347804626/An-Introduction-to-ISO-15926-pdf (accessed 30 August 2018).
11 11 Price R. (19 February 2015). What is operational excellence and how is it measured? https://www.eonsolutions.io/blog/what-is-operational-excellence-and-how-is-it-measured (accessed 2 July 2018).
12 12 Adams J. (For The Social Affairs Unit) (10 March 2005). Risk management: it's not rocket science – it's much more complicated. http://www.socialaffairsunit.org.uk/blog/archives/000318.php (accessed 11 June 2018).
13 13 Ibid.
14 14 Lipton M., Neff D.A., Brownstein A.R. et al (posted on 8 July 2015). Risk management and the board of directors. https://corpgov.law.harvard.edu/2015/07/28/risk-management-and-the-board-of-directors-3 (accessed 15 April 2017, emphasis in original).
15 15 Ibid. (emphasis in original).
16 16 Hayday D. (16 July 2013). Risk management: a process that is often avoided. www.projectsbyyonga.com/index.php/risk-management-a-process-that-is-often-avoided