Risk Culture

Implications for Risk Governance

Paris, July 9, 2015

Ortwin Renn

University of Stuttgart

Risk Characteristics Three challenges of risk management

Complexity in assessing causal and temporal relationships

Uncertainty

variation among individual targets

measurement and inferential errors

genuine stochastic relationships

system boundaries and ignorance

Ambiguity in interpreting results

Major Tasks for Risk Governance

Providing solutions for the three major challenges:

Complexity, uncertainty and ambiguity

Providing a dynamic framework that

facilitates adaptive management strategies

Assuring multi-actor input and institutional trust

Approaching the goal of a learning organization:

thus creating an adaptive management style

IRGC’s RISK GOVERNANCE FRAMEWORK

The Emerging Risk Protocol

Facilitation,

organizational

arrangements and

capabilities.

1. Making sense

of the present

and exploring

the future

2. Narrative

Development

3. Strategic

decision

Making

5. Conventional

Risk

Governance

IRGC’S Protocol for

Emerging Risk

Governance

6. More

monitoring

(Early warning

indicators)

7. More

resilience 4. Risk/opportunity

appetite

Approaches to Meet These Tasks I

Dealing with Complexity

Acknowledgment of the systemic character of risk

Interdisciplinary input

Creating a learning environment (constant screening and monitoring)

Emphasis on shared knowledge and epistemic discourse

Approaches to Meet These Tasks II

Dealing with Uncertainty

Focus on vulnerabilities and resilience

Necessity to consider and handle ignorance (precaution)

Stakeholder input essential

Emphasis on monitoring emerging threats and change of context conditions

Approaches to Meet These Tasks III

Dealing with Ambiguity

Inclusion of multiple values, perceptions, expectations and concerns

Creation of a culture of mutual trust (incl. openness, fairness and empathy)

Focus on forms of inclusive governance

Emphasis on value judgments and participatory discourse

Complexity

Epistemic

Use experts to

find valid,

reliable and

relevant

knowledge

about the risk

Uncertainty

Reflective

Involve all

affected

stakeholders

to collectively

decide best

way forward

Ambiguity

Participative

Include all

actors so as to

expose,

accept,

discuss and

resolve

differences

Simple

Instrumental

Find the most

cost-effective

way to make

the risk

acceptable or

tolerable

Agency Staff

Dominant risk

characteristic

Type of

participation

Actors

Inclusive Governance

Agency Staff Agency Staff Agency Staff

Scientists/ Researchers

Affected stakeholders

« Civil

society »

Scientists/ Researchers

Scientists/ Researchers

Affected stakeholders

As the level of knowledge changes, so also

will the type of participation need to change

Common “Errors” in Risk Culture I

• Focus the dialogue on risk while the problem is

in the justification of the activity

• Present the decision making process as

"scientific“ without placing enough attention to

the differences in value judgments

• Do not follow up hints of slowly aggravating

problems or context changes that may

compromise environmental or health related

goals

Common “Errors” in Risk Culture II

• Respond with “command and order” when facing

lack of commitment or performance

• Reduce complexity to single technical

dimensions and neglecting systemic causes and

interconnections

• Go into hibernation when your organisation is

under siege

• Misunderstand public concerns as (emotional)

attacks directed towards your organization

Vision of an Adaptive Risk Culture I

• Integrating expertise, experience and values

along their own trajectories

• Converting to a flexible and learning

management structure

• Revisiting and reviewing standards and

requirements in fixed time intervals

• Building trust through openness and

opportunities for mutual learning

Vision of an Adaptive Risk Culture II

• Co-framing of issues and tasks as a result of

mutual learning

• Working with multiple scenarios rather than

relying on irreversible procedures

• Establishing an inclusive governance approach

• Ensuring long-term consistency in line with the

principles of a learning organization

Conclusions I

Risk governance structures need to be tailored according to the main goal of creating a responsive risk culture

Risks should be characterized according to:

complexity

uncertainty

ambiguity

These characteristics require scientific expertise, sound judgment and inclusive governance strategies

Conclusions II

An inclusive risk culture entails:

Clear responsibilities and accountability

Adaptive management capabilities and procedures

Inclusion of external experts, stakeholders and members of the affected public when dealing with complex, uncertain and ambiguous risk contexts

Mutual learning opportunities

Institutional responsiveness to contextual changes