Critical success factors influencing enterprise risk maturity in South African metropolitan municipalities

Abstract

Enterprise risk management (ERM) addresses uncertainty by enabling organisations to achieve their objectives through structured processes and activities designed to identify, assess, and mitigate its causes. ERM has been adopted by the South African government, and all spheres of government are required to implement it. However, guidance on ERM best practices in local government is limited, and the prevailing enterprise risk maturity assessment tools are superficial. A qualitative research paradigm was adopted. The literature study was triangulated with 20 semi-structured interviews conducted in two metropolitan municipalities. The data were analysed using thematic analysis to identify themes and subthemes, which enabled the researchers to describe, conceptualise, interpret, and analyse ERM application and risk maturity in the selected municipalities. The article further identifies several critical success factors (Themes) that determine the extent of risk maturity in local government in South Africa, highlights several shortcomings in current risk maturity assessments, and makes recommendations for inclusion in future risk maturity model development. The unique contribution of this research is that it identifies the following critical success factors: governance effectiveness, oversight must be performance-oriented, accountability and responsibility, ethical leadership and management, leadership values, competency and experience, institutional capacity, political stability, risk-aware culture, risk and organisational performance, effective risk management process, effective stakeholder engagement and risk-based decision making.