The impact of regulation, ownership and business culture on managing corporate risk within the water industry

Abstract

Although the specifics of water utility ownership, regulation and management culture have been explored in terms of their impact on economic and customer value, there has beeti little meaningful engagement with their influence on the risk environment and risk management. Using a literature review as the primary source of informatioti, this paper maps the existing knowledge base otito two critical questions: what are the particular features of regulation, ownership and management culture which influence the risk dynamic, and what are the implications of these relationships in the context of ambitions for resilient organizations? In addressing these queries, the paper considers the mindful choices and adjustments a utility must make to its risk management strategy to manage strategic tensions between efñciency, risk and resilience. The conclusions note a gap in understanding of the drivers required for a paradigm shift within the water sector from a re-active to a pro-active risk management culture. A proposed model of the tensions between reactive risk management and pro-active, adaptive risk management provides a compelling case for measured risk management approaches which are informed by an appreciation of regulation, owtiership and business culture. Such approaches will support water authorities in meeting corporate aspirations to become 'high reliability' services while retaining the capacity to out-perform financial and service level targets.

Avoidance of operational sampling errors in drinking water analysis

“…The software allows to test different organizational scenarios, due to its flexibility, extensibility, and the fact that it could be customized. Allan et al (2013) studied the effects of regulation, proprietorship, and business culture on risk management within the water sector. The authors stressed that a paradigm shift is necessary.…”

Integrated project risk management for residential recycled water schemes

“…Risk management in the water sector has traditionally been reactive, rather than proactive (Allan et al 2013a), and risks have been over or under exaggerated, dependent on their nature (Luis 2014 The Guidelines consider the management of risks to human health and environmental health and are principled on hazard analysis, critical control points and quality assurance (Huxedurp et al 2014 analysis for identifying influences on scheme objectives and for the construction of possible futures based on the range of significant trend influences that may impact the water service. The manual then recommends the assessment of preferred investment strategies under future trend scenario paths and the identification of measures for reducing impacts to scheme viability (Mukheibir and Mitchell 2011).…”

“…This has the potential to result in conflicting management approaches, where a technical risk, or risk management measure, may cause a strategic risk to arise. Allan et al (2013a) highlight the limited attention that has been paid to the interplay between the risks associated with water utility actions and the measures adopted for managing such risks. tendency for risks to be considered at an abstract level only and effectively ignored in the assessment and decision-making process.…”

“…Integrated risk management, and associated methods, have historically been underutilised in the water sector (Marsden Jacob Associates 2013, Urich and Rauch 2014a, Luis et al 2015, although, in recent years, the need to develop an integrated understanding of risks, and to adopt integrative risk governance, has been emphasised (Larson et al 2009, Allan et al 2013a, Institute for Sustainable Futures 2013c, Luis et al 2015).…”