Exploring Factors Affecting Risk Management Effectiveness in the Department of Employment and Labour: A Western Cape Provincial Perspective
DOI:
https://doi.org/10.51137/wrp.ijarbm.655Keywords:
Risk Management Effectiveness, Enterprise Risk Management, Public Sector Governance, Agency Theory, Stewardship TheoryAbstract
Effective risk management is essential for enhancing organisational performance, strengthening accountability, and promoting sound governance within public sector institutions. This study looks at the variables affecting the efficacy of risk management in the Western Cape Department of Employment and Labour (DEL). To provide a thorough knowledge of governance, accountability, and leadership influences on risk management practices, the research is based on the Enterprise Risk Management (ERM) paradigm and further informed by Agency Theory and Stewardship Theory. Eight participants from various departmental hierarchical levels risk management practitioners, internal auditors, compliance officers, operational officials, and senior managers were interviewed semi-structurally as part of a qualitative case study design. Key organisational elements influencing risk management procedures were identified through thematic analysis of the data. Findings show that governance and regulatory restrictions, communication difficulties, capacity and skill shortages, and resource limits all have a major impact on the application and efficacy of risk management techniques. The department's capacity to apply proactive risk management techniques is hampered by these components' frequent interactions, which erode risk identification, assessment, mitigation, and monitoring procedures. The study also shows that stewardship-oriented leadership and robust governance frameworks can improve the efficiency of ERM implementation in public sector organisations. The study contributes to the existing body of literature by providing empirical insights into the risk management challenges faced by the Department of Employment and Labour and by offering recommendations aimed at strengthening institutional capacity, governance frameworks, and organisational risk culture to enhance risk management effectiveness.
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